Commonwealth Bank Awards American Express, MasterCard

Credit Card Review: Commonwealth Bank Awards American Express, MasterCard

What's Hot

  • Choice of earning points with Qantas or Virgin Australia

What's Not

  • Low points earning rates
  • Restrictive points capping
  • Multiple annual fees

X-Factor

  • None

Introduction

The Commonwealth Bank Awards credit cards come with both an American Express and a MasterCard on the one account to maximise your points and the places you can shop, but even when you are earning points, we daresay these cards are disappointing.

That's because at best, you'll get 0.6 Qantas or Virgin Australia frequent flyer points per dollar spent where AMEX is accepted, and up to 0.4 frequent flyer points per dollar when using the MasterCard: and that's if you stay within a very low points cap.

Australian Business Traveller takes a look at what has to be one of the worst frequent flyer credit card deals in the Australian market.

Commonwealth Bank Awards credit cards: fast facts

  • Grade/tier: Entry-level
  • Card type: American Express + MasterCard
  • Loyalty program: Qantas Frequent Flyer Direct or Commonwealth Awards
  • Annual fee: $59
  • Additional/supplementary cardholder fee: $10
  • Interest rate on purchases: 20.24% p.a.
  • Interest-free days on purchases: Up to 55
  • Interest rate on cash advances: 21.24% p.a.
  • International transaction fee: 3.5% AMEX, 3% MasterCard
  • Minimum income requirement: None defined
  • Minimum credit limit: $500

When choosing Qantas Frequent Flyer Direct:

  • Additional yearly opt-in fee: $30
  • Qantas Points earned per dollar – American Express: 0.6
  • Qantas Points earned per dollar – MasterCard: 0.4
  • Points capping: After earning 12,000 Qantas Points in a year, AMEX earn drops to just 0.4 Qantas Points per dollar spent while the MasterCard then earns no points at all. AMEX then stops earning points entirely after a further 8,000 Qantas Points have been collected that year for an all-out maximum of 20,000 Qantas Points.

When choosing Commonwealth Awards:

  • No additional yearly rewards fee
  • Earn Commonwealth Awards points, manually convert them to Virgin Australia Velocity
  • Velocity points earned per dollar (after converting) – AMEX: 0.6
  • Velocity points earned per dollar (after converting) – MasterCard: 0.4
  • Points capping: Earn up to 50,000 Awards points (20,000 Velocity Points) each year from either card, with no points earned until the next calendar year.

Payments made to the Australian Taxation Office do not accrue points in any case, regardless of your chosen rewards option.

Earning points for free flights: 1/5

With an annual earning cap of just 20,000 frequent flyer points – yes, that's annual, not per month – you'll barely earn enough points each year for a return domestic trip in economy: so don't apply for this card with the hope of flying in business class!

Accordingly, 16,000 Qantas Points could take you from Sydney to Melbourne and back again with Qantas in economy, while with Virgin Australia, a similar 15,600 Velocity points would unlock a comparable return economy flight.

That leaves just 4,000-odd frequent flyer points in your account, which could take you... well, nowhere at all.

We're also surprised to see such a low frequent flyer earning rate on CBA's AMEX card, given that spenders could instead reel in one Qantas Point per dollar spent via the Qantas American Express Discovery Card, or one Velocity point per dollar via the American Express Velocity Escape Card.

Those AMEX cards have no monthly or annual points capping either, not to mention no annual fees: so it's hard to imagine why someone would pay a fee to CBA to earn less points, when other cards in the market deliver considerably more points, and for free.

Airport lounge access, free insurance coverage: 1/5

As an entry-level card, we'd not expect to find any airport lounge access opportunities – although cardholders do have the option of purchasing access to American Express Centurion Lounges across the United States at a cost of US$50 per visit.

You'll find them in New York (LaGuardia), San Francisco, Dallas/Fort Worth, Las Vegas and Miami – and soon also in Los Angeles – but there's no access to the American Express Sydney lounge or the Centurion Studio in Seattle, even if you're happy to pay.

Travel insurance is understandably absent.

Commonwealth Bank Awards credit cards: our verdict

With a restrictive annual points cap, a further tiered earning rate for travellers collecting Qantas Points, an annual fee for all cardholders, a second annual fee to earn Qantas Points, an extra charge for an additional cardholder, plus no insurance coverage, it's hard to see how anybody could derive meaningful value from this card.

At best, it's an option for spenders with very low income, no credit history or a bad credit file, because with a minimum credit limit of just $500, this card should be easy to qualify for.

When managed responsibly, that would allow you to build up to a better credit card – either with CBA or another issuer – and once you reach a credit limit of just $4,000, you could also request a 'product migration' to the CBA Gold Awards cards without needing to apply all over again.

Guest

23 Jun, 2017 11:42 am

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