Overview

Frequent flyer credit cards earn frequent flyer points for eligible purchases made with a credit card linked to a specific airline’s frequent flyer program. The main frequent flyer programs directly linked to credit cards issued in Australia are Qantas Frequent Flyer and Velocity Frequent Flyer, and Emirates Skywards. Jetstar credit cards earn Qantas Points.

Frequent flyer points earned using the cards are credited directly to the cardholder’s frequent flyer points account with the airline. The points can be exchanged for award flights and seat upgrades, or other rewards and merchandise selected from the frequent flyer program’s online catalogue.

Indirect frequent flyer cards

In addition to the direct frequent flyer credit cards already mentioned, there are many indirect frequent flyer cards available in Australia. Every major credit card provider in Australia issues credit cards linked to its own in-house rewards points program, and in many cases the rewards points earned can be converted into various airlines’ frequent flyer points if the holder of the credit card also has a points account with the required frequent flyer program.

The exchange rate between in-house rewards programs and frequent flyer programs is rarely 1:1. Credit card providers will notify their cardholders of the prevailing exchange rate, and of any changes in the exchange rate. Typically, more than one rewards point is required in exchange for one frequent flyer point.

The frequent flyer programs linked to Australian credit cards for the purpose of points conversion include:

Qantas Frequent Flyer

Virgin Australia Velocity Frequent Flyer

Air New Zealand Airpoints

Singapore Airlines KrisFlyer Miles

Emirates Skywards Miles

Etihad Guest

Asia Miles (several Asian airlines, including Cathay Pacific)

Thai Royal Orchid Plus

Malaysia Airlines Enrich

Virgin Atlantic Flying Club

However, only American Express Membership Rewards Ascent Premium points can be converted to Qantas Frequent Flyer points, and most cards, with the exception of those with a truly enormous annual fee, only allow conversion to points with a restricted range of airlines – usually either two or three.

Points earning rates

Points earning rates are normally expressed in terms of number of points per dollar spent, e.g. 1.5 points per dollar spent on eligible purchases.

The rate at which points can be earned varies from card to card, and an individual card can have more than one earning rate, for example a higher earning rate on overseas purchases, or a higher earning rate at restaurants. Cards with a higher annual fee tend to have higher points earning rates.

Points caps and thresholds

While black cards are more likely to have no limit on the number of points a cardholder can earn in any month or year, other cards have points caps or thresholds.

A points cap is an absolute limit on the number of points that can be earned in any month or year. Once the cap is reached, the points earning rate for the remainder of the period falls to 0 points per dollar spent.

A points threshold is a limit beyond which the earning rate falls for the remainder of the month or year. For example, a card may have a 1.0 points per dollar rate, up to a threshold of $5,000 of spending per month, beyond which the earning rate drops to 0.5 points per dollar for the remainder of the month.

Sign up bonus points

Many frequent flyer credit cards offer sign up bonus points as an incentive to attract new cardholders. These sign up bonuses are more correctly described as first purchase bonuses, since they almost always have a target spending amount which must be met within a short time frame before the bonus points can be earned. However, most of these targets are not too difficult to reach. A typical offer might involve earning 60,000 bonus Qantas Points for spending $3,000 in the first 90 days of holding the card. This is clearly a great way to boost your frequent flyer points account, especially if you are saving points to redeem for a long-haul flight.

Other ways to earn frequent flyer points

Members of airline frequent flyer programs can obviously earn frequent flyer points by making flights with the airline (or its partner airlines) when those flights are paid for with cash or a credit card. (That is, it’s not possible to earn points by taking flights which were themselves purchased by redeeming points.) Credit cards linked to frequent flyer programs often offer a higher points earning rate for purchases of flights and seat upgrades made using the linked credit card.

But there’s also another way to earn frequent flyer points, simply by shopping at the Qantas Online Mall or the Velocity eStore. When you’re ready to purchase Australia’s favourite brands from the nation’s most popular retailers (including eBay), simply access their websites by clicking on the link at one of these airline online shopping program sites first. Your purchases will automatically be tracked and the frequent flyer points earned – up to 10 points or more per $1 spent – will be credited to your frequent flyer points account. If you pay with your frequent flyer points credit card you can earn points twice – once for shopping via the airline’s online mall and once for paying with your frequent flyer points card.

Qantas also offers more ways to earn points, including:

Taking Uber rides

Dining at selected restaurants

Using the Qantas Wellbeing app

Buying Qantas Insurance or Qantas Wine

Using GoCatch or ingogo apps for taxi rides

Booking Airbnb stays via Qantas

Catching a movie at HOYTS

Ordering a meal via Deliveroo

The Velocity Points program has similar deals. Some of the ways you can earn Velocity Points are:

Converting flybuys earned at the Coles group into Velocity points

Shopping in-store and online at selected retailers, including Freedom and Snooze

Booking a car with Europcar, Hertz or Thrifty

Making Flexicar or Ola bookings

And once again, paying for any of this with a frequent flyer credit card lets you effectively double dip.

Points expiry

Most banks’ in-house rewards program points do not expire while the credit card account is current. But frequent flyer points tend to expire if there has been no points earning activity (e.g. from credit cards, or from making flights where the fare was purchased with cash) and no points spending activity (e.g. booking an award flight with points or making other points redemptions) within a given period. At the time of writing, this ‘no activity’ period, triggering expiry of points, was 18 months for Qantas Points and two years for Velocity Points.

However, if you cancel your frequent flyer credit card you won’t lose any frequent flyer points already earned directly from the card, or already converted from in-house rewards program points into frequent flyer points.

Eligible purchases

Most frequent flyer and rewards credit cards stipulate that only eligible purchases will earn points. In practice, this means that cash transactions and cash equivalent transactions do not earn points. In other words, no points will be earned on cash advances, balance transfers, purchases of travellers cheques and foreign currency, card interest charges and fees, and transfers from a credit card account to another bank account.

As well as these types of cash transactions, many cards exclude government transactions (e.g. payments to the ATO, Australia Post, vehicle registration and licences, local government rates, fines, &c) from points earning, or allow them to earn points only at a lower rate. And it’s a good idea to read the small print, because some cards also exclude gambling transactions and BPAY payments from points earning.