Big Four Banks Cut Business Card Perks as Interest-Free Days Fall to 44

ANZ, CommBank, Westpac and NAB are all cutting business credit card benefits between August and October. The sharpest change is ANZ's, which shortens the interest-free period on Business Black and Qantas Business Rewards from up to 55 days to up to 44 for statements issued on and from 5 October. CommBank strips cover, the Westpac brands reprice points, and NAB has already dropped its bonus points.

The timing points to the Reserve Bank's card reforms, which start on 1 October, but they do not explain it. The Payments System Board cut the interchange cap on consumer credit cards to 0.3 per cent but kept the cap on commercial credit cards at 0.8 per cent, leaving the revenue behind business card perks untouched. Its March conclusions paper raised the possibility that issuers would reduce their cardholder benefits programs. That is now happening.

What each bank is changing

The ANZ change has a direct cash flow cost. Eleven fewer interest-free days is eleven fewer days between paying a supplier on the card and paying the bank.

CommBank closes its Awards program on 29 September and converts unredeemed points to CommBank Yello points by 7 October. Business cards then earn by Yello tier, from 1 point per dollar to 1.5 at Diamond, for eligible Yello customers. The same date cuts cover. Business Gold Awards loses trip cancellation, baggage, baggage delay, extended warranty and purchase security cover. Business Platinum Awards keeps trip cancellation cover at $2,500 for the cardholder and $5,000 with family, loses extended warranty, purchase security, price protection and interstate flight inconvenience cover, and adds a $500 excess on medical, cancellation and baggage claims.

Westpac, St.George, BankSA and Bank of Melbourne move on 30 September. Altitude Business Platinum and the Amplify Business card go from 1 to 1.5 points per dollar on domestic spend and 2 to 2.5 on international. A $100 eGift card rises from about 23,500 to about 29,412 Altitude points and from about 20,000 to about 29,412 Amplify points.

Per dollar, the result is mixed. At the new earn rate the Amplify eGift card costs about $19,608 of domestic spend instead of $20,000. The clear losses are airline transfers and rebates. Altitude points now convert to Qantas points at 4 to 1 instead of 2 to 1, so $1,000 of domestic spend buys 375 Qantas points instead of 500. The Amplify $100 fee rebate rises from about 18,000 to about 30,900 points, which is $20,600 of spend against $18,000.

NAB's move came on 1 August: its Rewards Business Signature card stopped paying Points Booster bonuses at selected retailers, hardware stores and overseas, which now earn the standard 1.25 points per dollar.

What to do

Map your supplier payments against the new due date. Mark which purchases on your last three statements fell in the final eleven days of each cycle. Those lose their float. Shift large, predictable purchases to the start of the cycle and pay suppliers offering 30-day terms by transfer.

Price your points in the redemption you actually use. A 50 per cent rise in earn against a doubled Qantas transfer rate is a cut. Against an eGift price that grows by less in spend terms, it is a small gain. Work out the spend behind your usual redemption before and after 30 September, then decide whether the card earns its fee.

Replace the cover before it lapses. If purchase security or extended warranty on a CommBank business card stands behind equipment you bought this year, that cover ends on 29 September. Check the manufacturer's warranty on each and price standalone cover where it matters.

Treat the card as the credit line it is. RBA figures for July show $2.2 billion of $9.7 billion in commercial card balances accruing interest, so most commercial card balances are cleared inside the interest-free window. Cutting that window cuts a working capital facility. Compare the shortened float against an overdraft or trade finance line where the cost is stated up front.

This article is general information only and is not financial advice.