Both Qantas and Virgin airlines have rolled out frequent flyer membership cards that double as prepaid debit cards that earn points for what you spend.
Both airlines have sent out these cards to customers who may or may not have requested them, attracting criticism from lawyers and consumer groups who say the mass mailout of cards is potentially “illegal” if consumers have not requested them.
But the media attention that these complaints have attracted may end up working in favour of Qantas and Virgin, with more people now aware of what these cards are and the benefits they can provide.
After all, these two cards are basically the only rewards debit cards available in Australia, giving you a chance to get more benefits and savings back based on how you spend your money. The only other cards offering rewards are credit cards, which usually have high annual fees and potential interest charges based on your account balance.
But will using one or both of these prepaid debit cards to get rewards really be worth it? Here we take a look at how points add up with these cards and the potential costs for both of them.
Qantas Cash Card
This prepaid MasterCard debit card option earns you one Qantas Frequent Flyer point for every $2 spent on the card and one point per Australian dollar or equivalent on international spending. The latter includes purchases made online with international retailers, which makes this card an appealing option for any overseas purchases.
The Qantas Cash card also gives you a way to save money on flights by waiving booking fees for Qantas.com purchases made within seven days of flying.
There are no initial or startup fees, no reload fees for money you put on the card and no card to card transfer fees if you decide to move funds from this card to another.
While there is a currency conversion fee of 3% to keep in mind, as a multi-currency card you can actually avoid this cost if you know what currency you will be using for purchases and preload it onto the card. There is a 1% debit card load fee of the total amount.
If you do regularly use this card, it definitely has potential to earn you more Frequent Flyer points and rewards without any added expenses.
Virgin Velocity Global Wallet
Like the Qantas option, the Virgin Global Wallet gives you points for shopping in-store and online, both locally and overseas at a rate of one point per $2 on Australian spending and one point per $1 on international transactions.
Both BPAY and POLiPay transfers to the Global Wallet are now free, but it is worth noting that if you first got the card in July 2013, there was a $1 loading fee (which has since been removed). In fact, there are only four possible fees you will be charged with this card:
- An inactive fee of $1 after 12 months without use,
- A foreign exchange fee of 3% of the total transaction cost,
- A supplementary card fee of $10; and
- An emergency cash transfer fee of $15.
As another multi-currency prepaid debit card, the foreign exchange fee of 3% is easily avoidable, and both supplementary card requests and emergency cash transfers are unlikely to become a regular part of your card use. That leaves the inactivity fee of $1 if you don’t use the card for more than 12 months.
All of these fees are easily avoidable, so if you did regularly use this card you could earn a lot for Velocity Reward points.
Say, for example, you used the card specifically for clothing purchases. With MoneySmart reporting that the average Australian spends $44 per week on clothing, you could earn between 1144 points (Australian spending) and 2288 points (international spending) in a year. As at 2014. The same calculations apply for the Qantas Cash card, which means you could choose to earn points for whatever rewards program is more appealing to you.
A debit card with rewards might sound like the perfect payment option, but it is important to weigh up the pros and cons before deciding to activate either the Qantas Cash card or the Velocity Global Wallet.
By considering the potential fees and reading the terms and conditions for these two cards, you should be able to make an informed decision about whether or not you want to add them to your wallet.