I also received the AMEX points earn reduction letter, on a Diamond card it reduces from 3 points / $ to .5 points / $ at non supermarkets/petrol.
The Diamond Mastercard still earns 1.25 points per $. Tonight I received a email (targeted) offering DOUBLE POINTS MAY 8 - MAY 31st. So my calculation is 2.5 points / $ on the Diamond Mastercard.
Couple this with the 15% bonus CommAwards > Virgin Velocity bonus, it's a nice little earner. Or so I thought.
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So I thought i'd work through an equation based on an assumed spend of $10,000 this month to achieve the bonus, and see if it was worth it.
My May statement date is the 28th so purchases before then get 2 X points, and I get them on the 29th so I can transfer them with 15% velocity bonus before 31st May.
But by delaying my purchases/bill payments until the 30th, I still get double points and extra interest-free days (54 days) so with the opportunity cost of funds at say 6% pa of $10,000 and I get to keep that money for longer, offsetting about $84 of interest costs. I forgo the 15% Velocity bonus, that's worth less than $20.
Spending $10,000 on Diamond Mastercard at 2.5 points / $ = 25,000 points
25,000 Points /2 CBA points / 1 Velocity Point = 12,500 Velocity + 15% Bonus points 1875 = 14,375 points.
So 25,000 CBA POINTS = 14,375 Velocity Points.
25,000 Commonwealth Points is Worth = $125.00 Coles / BP Gift Card (OR $62.50 if not 2x Commonwealth points)
14,375 Velocity points is worth $145 of Virgin flights MEL-SYD ECONOMY ( MEL-SYD 11,100 points or $112 Cash) (OR approx $68 if not 2 x Commonwealth Points)
14,375 Velocity points is worth $173 of Virgin flights PER-SYD ECONOMY ( PER-SYD 20,500 points or $249 Cash) (OR approx $77 if not 2 x Commonwealth Points)
14,375 Velocity points is worth $827 of Virgin flights PER-SYD BUSINESS ( PER-SYD 38,200 points or $2200 Cash) (OR approx $370 if not 2 x Commonwealth Points)
So either option, the best use of points is BUSINESS CLASS. But that's only if you need to fly somewhere. The better option for some may be the COLES voucher, as you would normally us $125 of AFTER TAX FUNDS, this $125 is essentially tax-free or pre-tax money. You were going to do your shopping at Coles anyway, so this way there is no increase in expenditure just to use the points.
The best option seems to be to take advantage of the 2X Points offer and purchase on 30th to get the extra interest free days (push the purchases into the next month) and forgo the 15% Velocity bonus, as the cost of the funds outweighs the 15% points bonus. Then buy the Coles / BP Vouchers. (assuming you eat food and use fuel).
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