Fees frenzy over platinum cards
THERE was a time when having a platinum credit card was a sign of your wealth and status.
But a discounting war has broken out between card issuers putting them within the reach of many, if only to enjoy the sensation and rewards of having one for a year.
Competition is so fierce for new credit card customers that the issuers of three different platinum cards are waiving their annual fees, which can add up to nearly $400, for the first year.
That means anyone who earns enough may qualify, and if they cancel the card just before the year is up, they will have paid nothing for the kudos of flashing the card around.
They’ll also reap an extra haul of Airpoints Dollars, because platinum cards have higher rewards rates than standard Airpoints cards.
American Express has a directmail campaign going and is writing to ‘‘keen travellers’’ earning $65,000 or more, offering its Air New Zealand American Express Platinum card.
People who apply before the end of the year won’t have to pay the $395 annual fee, the letters say.
In addition, they’ll get a ‘‘bonus’’ 200 Airpoints dollars if they spend $500 or more on the card in the first three months of having it.
The card also gives the holder one complimentary direct domestic return flight on Air New Zealand every year, and discounted membership of the Koru Club – the joining fee is waived, and there’s a discount of $145 on the $580 annual fee.
American Express’s call centre confirmed no annual fee would be charged, if the card was cancelled just before the year was up, and any Airpoints earned would remain in the cardholder’s Airpoints accounts.
American Express isn’t the only card offerer vying to get people to take out platinum cards, which have taken the place of gold cards as the most expensive, but most feature-laden, of the credit cards on offer.
Extra features include concierge services and travel insurance that’s better than is offered with gold cards.
Westpac and ANZ are also discounting their premium cards.
People taking out a Westpac Airpoints Platinum MasterCard by October 30 won’t have to pay the $145 annual fee for the first year, if they use the card to buy something in the first 60 days of having it.
Westpac confirmed there’s no penalty for cancelling the card just before the free year is up. Customers moving credit card debt from a rival card issuer can also get a reduced interest rate.
ANZ has a platinum card offer running till the end of the year.
It will waive its $150 annual fee, and throw in a one-way domestic flight for new cardholders who spend at least $1000 on ‘‘eligible’’ purchases in the first three months they have it.
Air New Zealand has a handy comparison page on its website showing the ANZ, Westpac and American Express platinum cards all earning one Airpoints Dollar per $75 of ‘‘eligible’’ spending. Standard cards tend to earn at around one Airpoints Dollars per $120 spent.
Air New Zealand head of customer loyalty Mark Street said the competition for new card customers had been good for consumers. ‘‘We are going through a period of significant growth at the moment. The membership size is over 1.9 million and will hit 2 million before Christmas.’’
That was partly due to the competition, which has seen card issuers compete by lifting earn rates, making their cards more attractive.
Street said that over the past 12 months, 750,000 flights had been taken by members using Airpoints.
But before opting for a rewards scheme, it’s important to know what you are likely to earn, and whether it is worth the fee.
In August, Consumer New Zealand crunched the numbers and found the returns many rewards cards offered were ‘‘disappointing’’. ‘‘Even spending