Westpac Introduces Rewards Points Cap

Westpac Earth Credit CardPutting a cap on credit card rewards points is not something new, but in the Australian credit card market it's definitely not commonplace. Most credit cards with rewards allow unlimited points earning potential, and where there are caps in place they are fairly generous.

Westpac has announced that they will be introducing reward points caps on some of their credit cards. At first it sounds like bad news, but it's worth delving a little deeper to see how some of these changes will affect you if you have a Westpac credit card  or if you're contemplating getting one.

What Are The Changes?

These changes only apply to Westpac credit cards with reward programs attached to them. Up until June 16th 2013 there are no changes. It is only on the statement cycle starting on or after June 17th 2013 that the changes will take place. A statement cycle is monthly.

For example if your statement cycle runs from the 8th of the month to the 7th of the following month, your statement from June 8th to July 7th will not be affected by the changes and they will be applied on your statement that begins on July 8th.

Which Cards Are Effected?

The Westpac Earth and Earth Platinum Qantas Frequent Flyer cards are part of the change as well as the Westpac Altitude cards.

Westpac Altitude: This card is part of the Altitude Rewards Program. An American Express and a MasterCard or Visa are included on the one account. Using the Amex gives 2 points per $1 spent and the MasterCard and Visa give 1 point per $1 spent. Points earning is now capped at 5,000 per statement cycle.

Based on a 75/25 split between Amex and MasterCard or Visa you would earn 5,000 points in a month from spending $2,857.

Westpac Altitude Platinum: This credit card is also part of the Altitude Rewards Program. Like the standard Altitude credit card you earn double points for spending on your Amex. Points earning is now capped at 7,500 per statement cycle.

Based on a 75/25 split between Amex and MasterCard or Visa you would earn 7,500 points from spending $4,285.

Westpac Altitude Business Gold: This credit card account includes an American Express which earns 2 Altitude reward points for every $1 spent and 1 point per $1 spent on MasterCard or Visa. Credit card use from business owners is a popular method of building reward points as business expenses can quickly accumulate. This card is introducing a cap of 20,000 Altitude points per month.

Based on a 75/25 split between Amex and MasterCard or Visa you would earn 20,000 points in a month from spending $11,428.

Westpac Earth: This credit card is connected to the Qantas Frequent Flyer Program. An American Express and a MasterCard are included on the one account. Using the American Express gives 1 point per $1 spent and 0.5 points are awarded for every $1 spent on the MasterCard. A points cap of 2,500 Qantas Frequent Flyer points is in place per statement cycle.

Based on a 75/25 split between Amex and MasterCard you would earn 2,500 points in a month from spending $2,857.

Westpac Earth Platinum: The platinum version of the Earth credit card also earns Qantas Frequent Flyer points. The Amex likewise earns twice as many points as the MasterCard. The new points cap of 3,750 Qantas points per statement cycle is being introduced.

Based on a 75/25 split between Amex and MasterCard you would earn 3,750 points from spending $4,285.

Does It Really Matter?

If your spend levels are always below the monthly caps then these changes really won't affect you. If you have a spike in spending every now and then, you will potentially be missing out on reward points that you could be earning with a different credit card. You need to weigh up the benefits of having one of these Westpac Cards against moving to a different card and having no points earning restrictions.

If you consistently earn points around or over the points cap then it's really time to look at different rewards credit cards. Westpac has no doubt looked at spend levels on cards and chosen caps which will not affect most consumers. But if you are about to lose value from your credit card rewards program there are plenty of banks and financial institutions that are waiting to reward you for spending big each month!

What About Bonus Points Offers?

All of these Westpac credit cards currently have a bonus points offer when you first spend on the card. These bonuses range between 10,000 and 20,000 points - an attractive lump sum addition to your reward points balance!

Fortunately bonus points are not included in the cap! It wouldn't make a lot of sense to get 10,000 bonus points if it was capped at a lower amount.

MoneyBuddy Opinion

We're definitely not supportive of a move like this that will restrict the ability to earn rewards points. In recent years there has been an industry wide trend in Australia to offer less and less value with credit card reward programs and this is further evidence of that happening.

Moves like this do little to ease the public perception of banks being greedy - especially the Big 4. It will be interesting to see whether this is a short term move that is ultimately reversed by Westpac (we're doubtful) or whether other banks follow their lead (more likely) and start introducing caps on reward points.

But even though the trend is in declining value, there are still a lot of benefits to be reaped from rewards programs by the savvy credit card user. Most banks still offer unlimited points earning potential, so Westpac is currently in a minority.

With the ease of being able to switch credit cards, if you are a current Westpac customer and don't like the new restrictions, then take your business elsewhere. But if you don't use your credit card a lot and your earning potential isn't likely to be impacted then signing up for a new Westpac Altitude or Earth credit card could be the way to go.

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