ANZ have today announced changes to their ANZ Airpoints credit cards effective from the 20th February 2023, with the changes seeing a reduction in Airpoints Dollar (APD) earn, and a change in the way status points are earned.
For ANZ Airpoints Visa cardholders the changes will see a reduction in earn from APD1 per NZ$130 spent on the card to APD1 per NZD$170 spent on the card, and for ANZ Airpoints Platinum Visa cardholders a reduction from APD1 per NZ$85 to APD1 per NZ$110. For ANZ Visa Business cardholders APD earn will reduce from APD1 per NZ$75 to APD1 per NZ$85, or APD1 per NZ$50 of spend with Air New Zealand (for the first NZ$25,000 per annum).
This change is driven by the Government's move to regulate credit card interchange rates in New Zealand with the introduction in November 2022 of the new Retail Payments System Act which sets new maximum rates that can be charged in interchange between the card companies and retailers. As interchange rates have been cut significantly and card loyalty schemes are funded by a portion of these interchange rates, the reduction sees reward scheme rates having to drop.
ANZ and Air New Zealand have also fundamentally changed the way Air New Zealand status points are earned on ANZ Platinum Visa cards. Previously customers could earn status points by credit card spend, with 1 status point (SP) earned per NZ$250 spend on the card. An influx of customers moving to Airpoints cards in recent years (with American Express, Westpac and Kiwibank all offering Airpoints cards) has seen a growing number of Air New Zealand customers earn airline status without doing a lot of flying - I'm personally aware of one person who puts NZ$150,000+ per year in business expenses on their credit card which is enough to earn them a minimum of 600 status points per year without flying, enabling them to easily get to the 810 status points required to requality for Air New Zealand Gold status.
ANZ Airpoints Platinum Visa holders will no longer earn any status points for card spend, and will instead earn 50% extra status points on every flight they take take with Air New Zealand - so for example a somebody flying between Wellington and Auckland receiving 22 status points for the flight will now receive a bonus of 11 status points.
With crowded airport lounges and disgrunted customers unable to use complimentary recognition upgrades due to too many Airpoints Silver, Gold and Elite passengers on flights, Air New Zealand have clearly made the decision to do something about this and are now moving towards rewarding cutomers who actually fly on planes with additional status points, rather than those customers who often fly infrequently but have the ability to shift large amounts of money through their credit cards.
Complimentary lounge vouchers are also gone, with ANZ offering two complimentary lounge vouchers to customers as a good will gesture and then removing the benefit. Previously ANZ customers would earn 2 additional lounge vouchers for every NZ$30,000 spent on their card.
The changes are an interesting mix, with card scheme rewards having to reduce with all card companies due to credit card interchange rates being slashed. Many customers (myself included) are now also spending less on their credit cards due to the prolific increase in retailers in New Zealand having introduced credit card surcharges since November. The Commerce Commission and Government saw the purpose of the new Act and reduced credit card interchange rates to improve competition in the market and reduce costs for retailers, but it's pretty clear in the last few months that the exact opposite has occured. There is very little benefit in paying a 2% surcharge at a retailer to use my credit card when I can use my EFTPOS card and pay no surcharge.
The move to scrap status points earn for card spend and offer a 50% bonus when flying will be a massive benefit for many customers but will severly impact those who flew very little or gained status primararly with card spend. What is interesting is that the terms and conditions have zero exclusions on this 50% bonus, with the only requirement to be a ANZ Visa Platinum or ANZ Visa Business cardholder. I would have expected at a bare minimum that to be eligible for the 50% bonus that the flight would have needed to be purchased with the ANZ Visa card. It will be possible to effectively triple dip by purchasing the flight with another Airpoints earning card (such as an American Express) that still offers status points earn on spend, earn status points for the flight, and then earn a 50% bonus for being an ANZ Visa cardholder.
For those people who do fly reasonably frequently the potential status point earn from this change would be far in excess of what could be earned using a credit card - somebody spending NZ$25,000 per year on the credit card could potentially earn somewhere in the vicinity of 100 status points per year from their card, whereas somebody booking a single longhaul flight to the USA could easily earn 100 bonus SP for flying with the 50% bonus.
Whether Air New Zealand roll out these status point earn changes to American Express, Westpac or Kiwibank cards is yet to be seen but it certainly would not surprise me to see these cards all change in the future.
The changes also leave the door open to Air New Zealand to offer it's own credit card with a very different approach to benefits. In 2021 Air New Zealand indicated it was planning to launch it's own branded credit card and entered into an agreement with hummgroup to deliver a Air New Zealand branded credit card delivered using their white label card solution, but in September 2022 hummgroup announced to the ASX that this agreement had been terminated.
