Disturbing News from RBA about earning Frequent Flyer Points

[2infinity]

RBA is seriously considering stopping credit cards from offering reward points. This could come into effect in May 2016. OMFG, this is bad news. I'll never be in the pointy end again. Help stop the RBA here - www.dontpassthebuck.com.au

 

[samh004]

I can't imagine this would happen.

 

[ric_melb]

The RBA is reviewing the Interchange fee. Whilst this may reduce the points earning capacity of our cards, it does not mean that the RBA is considering stopping points being earned altogether on credit cards.

 

[opusman]

Already being discussed here.

 

[kdser]

Thank you for providing the link to the website. Have signed the petition and emailed the PMs.

 

[Isochronous]

Thanks for bringing this petition to our attention. It's important we stand up and fight to protect our points-earning capacity from this ridiculous nanny-state interventionism.

 

[Jousams]

As I noted in a previous thread, this petition is not only about the reduction in points earn from the changes to the law. Please read and understand what you are putting your name to before you sign.

I don't like getting involved in Australian politics as I don't like lowering myself to the immaturity of the current politicians on both sides. As such I'm not really happy that AFF sent me an email with a link to this petition which is being run by a politically active group.

 

[whatmeworry]

RBA is seriously considering stopping credit cards from offering reward points. This could come into effect in May 2016. OMFG, this is bad news. I'll never be in the pointy end again. Help stop the RBA here - www.dontpassthebuck.com.au

This petition is a astro-turfing attempt by Liberal party member Tim Andrews.

https://www.taxpayers.org.au/team/

 

[kdser]

This is not an election where you have to choose labor or liberal. This is an individual matter that you can choose to support or not. I have given my support. The RBA reform doesn't make sense. It distort the free market and transfer financial interest from consumers to businesses by force.

 

[JohnK]

If the RBA stopped the ability to earn frequent flyer points on credit cards a lot of AFFers are going to need years of therapy to try and recover their sanity.

 

[SeatBackForward]

You pay for the points one way or another. I doubt this will make any difference in the long run.

 

[Dr Ralph]

Complete beat up.

 

[sumthinfornuthin]

I can't imagine this would happen.

I tend to agree but I reckon they all have a tiger by the tail with the various loyalty programs running and would not be totall sad if someone else shot it so they could let go of the tail....HOWEVER I hope I am wrong

 

[sumthinfornuthin]

This is not an election where you have to choose labor or liberal. This is an individual matter that you can choose to support or not. I have given my support. The RBA reform doesn't make sense. It distort the free market and transfer financial interest from consumers to businesses by force.

I personally don't think the petition will make one iota of difference to what the RBA decide as the BIG BOYS will all put their submissions in and a pissy on line petition will hardly see the light of day HOWEVER having said that,,,,, as with all things in life ONE must always try even if it is hopeless and I have signed too. WE ALL HAVE A VESTED INTEREST IN THIS ONE irrespective of politics and just maybe if there are tens of thousands of signatures it might just help

 

[newcomic]

Relax, the RBA isn't going to stop us earning Points. Earn rates on Visa and MasterCard will probably reduce in 2016 onwards, but American Express Proprietary remains untouched from the regulation. So you can continue reaping the rewards for years to come.

I have already posted this article I read the other day which I thought was quite good.

Why we still think it’s a really good idea to get an Amex Proprietary Credit Card - The Points Team

 

[lovetravellingoz]

Relax, the RBA isn't going to stop us earning Points. Earn rates on Visa and MasterCard will probably reduce in 2016 onwards, but American Express Proprietary remains untouched from the regulation. So you can continue reaping the rewards for years to come.

Why relax? Point earn is reducing. I will not start tilting against willmills, but I do not have to be happy about the changes.The bank issued Amex earnt on many things is at higher earn rate than the Amex issued ones. This decline in point earn across all these card types means that one earns less points.

Many of us operate a suite of cards to gain the highest earn rate. If all the bank issued Amex get reduced rate my earn on many things will drop from 1.5 KF (or QFF) / $ to just 1.0 (This includes both direct payment and paying through PayPal to get arround some comapanies that do not accept Amex).

For VISA/MC I had been using a fee free card to maximise my KF earn. This option is about to become less with the double wammy of less points earnt, and a pooer transfer rate. There are for the moment still some 1 QFF/$1.0 cards which I do not currently have. But who wants to earn QFF (They are my FF program of last resort).

Those who buy points by paying the surcharges (not I) will be even worse off.

From my perspective this is the second big point earning devaluation in recent years (others will count the ATO changes as a big (or bigger) loss for them as they could pump through vast amounts of taxes from businesses).

* This will probably mean that I will earn about one third less points from spend per year.
* Painful, but not as painful for me as Amex not running its points bonus promos any more (this dried up just over a year ago). These allowed me to earn many additional multiples of my yearly spend per year such that my base earn per $ was the much small amount of my yearly earn.

Credit card sign-on bonii are currently plentiful. But this has always come and gone with some years being lucrutive and others not so good.

 

[Renato1]

I didn't entirely like the prepared letter to the RBA from don'tpassthe buck, so I modified it to the following.

"I am writing to express my concerns about the Reserve Bank’s plans to increase costs on consumers.
In the RBA’s consultation paper on credit card payment standards, the RBA proposes to further regulate interchange fees. I am advised that this will mean higher credit card interest rates, higher annual fees, while interest-free periods will be cut, and reward points will be slashed.

The RBA already tried this in 2003, and as a result we were slugged with billions of dollars in extra fees. Now the RBA wants to make this even worse. Like millions of Australians, I rely on my credit card – and I do not like higher fees from RBA interference in what is supposed to be a free market.

I am advised that the proposed regulations will particularly affect credit cards linked to rewards or frequent flyer programs. I really value my rewards program, and rely on this to keep my travel costs low while my wife and I fly around Australia, and provide benefits to the Australian tourist industry.

Businesses are the ones who benefit from the fraud protection and other services that interchange fees bring. The RBA shouldn’t give into their lobbying and pass the buck onto my family and me. Does the RBA really want this proposed action to become the subject of future case studies at Business Schools as to confirmation of Stigler's theory of economic regulation (that regulations mainly benefit those being regulated)?

I strongly urge the RBA to make a decision in the best interests of Australian consumers by not making credit card regulation even worse.

While the RBA, in my opinion, contemplates slugging consumers in Australia, I note that it has done little to seriously question the foreign exchange fees charged by Australian banks on credit/debit card foreign transactions. Typically, they are at around 3%, but I have seen them even higher, and just about everybody that I know pays them (or are conned into buying expensive travel cards). Yet American organistions operating in Australia - for example, Citibank and GE Money - charge no such foreign exchange fees (and no annual fees for that matter) and appear to oeprate quite profitably, and frequently giving wine or cash rewards to their clients.

Plainly inertia or lack of information results in Australian credit/debit card users getting slugged in the manner that they already subject to. Why add to their burden?

I look forward to hearing from you."