Australia’s biggest bank pushes Virgin over Qantas in loyalty scheme overhaul
Commonwealth Bank has joined forces with Virgin Australia to relaunch its loyalty program, snubbing former airline partner Qantas.
The bank announced changes to its rewards program on Tuesday, introducing its new Yello points currency, which customers can earn through banking and everyday spending.
Commonwealth Bank has joined forces with Virgin Australia for its relaunched loyalty program. Sam Mooy
The changes come ahead of a ban on credit card surcharges in October imposed by the Reserve Bank, which funded perks – including frequent flyer points – for banking customers.
The new CBA scheme will allow bank customers to convert Yello points to airline points, with a more generous rate offered for Virgin Velocity than Qantas Frequent Flyer.
There are currently more than 18 million Qantas Frequent Flyer customers, making it Australia’s biggest loyalty program.
Under the new program, bank customers who have multiple products with Commonwealth Bank, including a mortgage or term deposit, will earn more points.
However, experts have urged customers to do their research.
Canstar.com.au data insights director Sally Tindall said the bank’s relaunched rewards program was the latest attempt to build customer loyalty.
“CBA has spent decades building customer loyalty and the overhaul of Yello is the latest attempt to make that loyalty even stickier,” Tindall said.
“However, the devil will be in the details.
“Earning points on a wider range of banking products might sound appealing, but customers shouldn’t assume this will automatically mean they’re going to get a better deal.
“If you’re getting a perk for something you would have taken out anyway, rewards points can be a genuine bonus.
CBA’s move will benefit Virgin customers over Qantas frequent flyers. Getty
“However, if the lure of more points is influencing your decision-making process, and you end up spending more or opting for a less competitive rate, the maths could quickly work against you.
“It’s also worth remembering that a reward is only worth something if you actually use it.
“There’s no point collecting points that sit untouched or chasing discounts on things you wouldn’t otherwise buy.”
Tindall said while a one-stop shop could feel convenient, that convenience often came at a cost.
“If you’re looking for competitive rates and lower fees, it is well worth shopping around beyond the four walls of your main bank,” she said.
“Technology has made switching and managing accounts easier than ever.
“If keeping your money with the best providers for your finances simply means having an extra app or two on your phone, so be it.”
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