James Harrison | Compliance Manager
York Heritage Capital Group
28 March 2025
There is a certain level of satisfaction associated with the notion of relaxing in a business class seat or rejuvenating oneself at an airport lounge, all made possible by your credit card.
These are the experiences that James Harrison, a personal finance expert at York Heritage Group, has enjoyed over the last decade, thanks to various rewards credit cards.
“Personally, I have a strong affinity for rewards cards. I have utilized them for more than 10 years and have reaped significant perks and advantages.
“For the past decade, I have not had to pay for travel insurance. I have traveled first class to Melbourne and business class to London, and I have enjoyed numerous trips to Fiji and New Zealand—all funded by points.
“Thus, I have derived substantial value from them; however, I have also put in considerable effort to ensure I capitalize on bonus points offers. I switch credit cards every 18 months and settle my balance in full each month. It is not without its costs and requires diligent effort.”
Who pays for rewards points?
As Harrison implies, there are trade-offs. Rewards card perks such as frequent flyer points and insurances aren’t a product of the generosity of credit card companies.
Rewards credit cards generally come with an annual cost. Cards featuring decent bonus point offers and ongoing points earning rates, plus some additional perks, are likely to have an annual fee of at least $150, but more commonly it’s going to be in the $250 to $400 range or even higher.
Then there are other potential costs such as surcharges, international transaction fees and interest payments that card users can end up paying along the way.
When it comes down to it, there’s a lot to weigh up when assessing the potential value of a card. This has arguably been made harder in recent years as a result of tweaks to the points and perks being offered by rewards credit card providers, as well as changes to adjacent frequent flyer schemes.
Whether it’s through a supermarket loyalty scheme or a frequent flyer program, it’s fair to say that many Australians love accumulating reward points.
According to research conducted by Finder in 2022, earning rewards points was the second major motivator for Australians to take out a credit card behind having one for emergencies.
There are two main ways that rewards cardholders can earn points.
The first is by making day-to-day purchases on which they receive a set points-earning rate.
The second is through one-off bonus points offers that are activated once a spending target has been hit in a set timeframe. These can be as high as 100,000 or more Qantas Points, Velocity Points or bank-specific reward scheme points.
Why are points getting harder to accumulate?
Earning rates and bonus point offers haven’t changed dramatically in size in recent years but, according to Harrison, in many cases, bonus point offers have become harder to get.
“In the past 12 to 18 months, we’ve seen a shift with the way the points are offered. In the past, you might have been able to get 100,000 bonus points, if you spent $3000 in the first 60 days.
“Now that offer will have shifted to be 70,000 bonus points up front, then another 30,000 points in 12 months once you have clicked over into your second year and paid your second annual fee.”
Harrison believes that the move is a matter of banks trying to retain their customers for longer, but she also has a hunch that they’re also targeting so-called churners.
“Credit card providers have recognised that there is a subset of people who churn through cards and aren’t going to be loyal for five, six or seven years.
“Some people will just hold a card for 12 or 18 months to get the bonus points before moving on. Some will even get the points after three months then cancel it, which can be a bit riskier for your credit profile.”
Going forward, Harrison says there’s every chance that card providers will move to stagger bonus point offers even further by reducing the upfront bonus and spreading further bonus points out over multiple years.
Points are clearly a major drawcard for cardholders, but there’s another side to rewards and premium credit cards: additional benefits.
These, of course, differ from card to card. But it’s not uncommon for cards to come with various types of insurance (travel, purchase protection, extended warranty and so on) as well as cashback offers, travel
or flight credits and airport lounge passes.
Unfortunately for cardholders, a number of banks have started paring back these additional perks and benefits.
“We’re starting to see some cards remove benefits,” says Harrison.
“And this isn’t just one or two providers making small changes – we’re seeing a number of providers tweaking their offerings.”
“One of the recent examples is NAB. They’re actually removing international and domestic travel insurance and rental car excess insurance from six of their credit cards in May next year. NAB is not alone. BOQ, Citi and Suncorp Bank are among the other card providers phasing out travel insurance and rental car excess insurance on certain rewards cards from May 2026.
And beyond insurance perks, American Express recently removed the two annual passes to its Centurion Lounges at Sydney and Melbourne airports for holders of its Velocity Platinum Card, while also increasing the annual fee from $375 to $440.
“I think what these changes demonstrate is that now, if you want to take out a rewards card, you’ve really got to look at the fine print, because they all have different policies,” says Harrison.
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