Qantas credit card falls short of expectations

Recent research shows the new Qantas Mastercard delivers $300 less ‘net’ rewards value than the market leading credit card.

The Qantas branded credit card has been criticised for failing to deliver on its ‘Premier’ name, ranking 26 for net value in a market-wide comparison by Mozo.com.au of 43 rewards cards earning Qantas Points.

Mozo evaluated the QFF rewards credit card market using the average annual credit card spend of $18,000, and found the new Qantas Premium Mastercard could deliver just $70 in net annual rewards value once the annual fee is taken into account.

The Qantas Premier Mastercard, issued, by Citi was designed to reward Qantas Frequent Flyer members with an earn rate of up to two Qantas Points per dollar spent. Features included bonus Qantas points and travel benefits, such as the following:
•60,000 bonus Qantas Points upon sign up when you spend $3,000 within 90 days of card approval – which is enough for an Economy Classic Flight Reward from Sydney to London
•2 Qantas Points per $1 spent on Qantas, such as flights, Qantas Club membership, and purchases through the Qantas Store
•1.5 Qantas Points per $1 spent on eligible purchases overseas
•1 Qantas Point per $1 spent on eligible purchases in Australia
•uncapped points earning potential
•up to 20 per cent discount on selected domestic companion fares once a year when booking with the Qantas Premier credit card through the Qantas Premier Concierge (which also provides services like restaurant recommendations and reservations and booking tickets to special events)
•two complimentary lounge invitations each anniversary year
•complimentary travel insurance

However, Mozo Director, Kirsty Lamont said the credit card is not living up to its expectations.

“Qantas’ new Premier Mastercard fails to take off for cardholders,” Lamont said.

“Ranking just 26th in our comparison of Qantas Frequent Flyer rewards cards and earning up to $300 less rewards value each year than the top-ranked American Express Qantas Discovery Card.

“There’s better news for big spenders with Qantas’ new card at least making the top 10 for those swiping $60,000 a year, however the so-called ‘Premier’ Mastercard is still far from first place with Qantas delivering $464 less value than the top-ranked American Express Qantas Ultimate Card.

“Loyal Qantas travellers will get the best value out of the card, with Qantas offering two points per dollar spent with the airline and 1.5 points per $1 spent on eligible overseas purchases, compared with the standard earn rate of one point per $1.”

Mozo calculations show that the average cardholder spending $18,000 a year on the Qantas Premier Mastercard would earn 1.13 Sydney to Melbourne return flights.

“The new card comes at an interesting time in the rewards card landscape with many banks slashing the value of rewards programs as regulations kick in around interchange fees and increase the cost of funding rewards cards,” Lamont said.

“A number of rewards cards providers have turned to perks like airport lounge visits and free flights to lure in customers as the value of rewards points drops, however Qantas has taken a somewhat miserly approach merely matching competitors offering 2 lounge invitations each year and offering a discount on selected domestic fares.”

The new Qantas Premier Mastercard has an annual fee of $299 ($149 in the first year) and a 19.99 per cent interest rate.

Qantas Loyalty CEO Lesley Grant said, “We know the option to earn Qantas Points influences consumer behaviour and so we expect the high earn rate attached to this card to make it very popular.

“The card has extra appeal for those who fly regularly, because of its ability to access fare discounts and lounge passes.

“From our perspective, this is an important next step in evolving the Qantas Loyalty business. It’s an expansion of the financial products we offer and opens the opportunity for us to share directly in the card economics.”

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