Nicolette Dirk, finance writer, Justmoney.co.za
If you are just interested in air miles reward schemes then which credit card provider offers the best reward scheme? What are the pros and cons of airmile reward schemes?
Justmoney surveys eight well-known air mile reward schemes:
1. Discovery
DiscoveryCard holders, who activate the Discovery Miles benefit at an annual fee of R350, will earn Discovery Miles on their qualifying card spend. The Discovery Miles can be converted to Avios and Voyager Miles, used to pay for travel on Kulula or can also be used as payment for purchases made through the online Discovery mall portal for a number of items ranging from entertainment products, flights, house and home supplies.
2. American Express
With American Express’s Platinum card you also get rewarded every time you spend. Membership rewards are accumulated where you get 1.5 points for every R5 you spend. Points can be earned through weekly shopping, petrol and even utility bills. When it comes to redeeming points for flights, there are no restrictions of who you can fly with or when you can fly.
You can even transfer your points into the frequent flyer programmes of six airline partners, including British Airways, EL AL, Kulula, Mango, South African Airways (SAA) and Virgin Atlantic.
3. Nedbank’s SAA Voyager
With the SAA Voyager credit card you earn miles with every R6, 50 you spend on this gold credit card. You can accelerate your earning rate if you fly with SAA or their other worldwide partners like Virgin Atlantic, Emirates and Turkish Airlines. Your reward rate will also go up if you use their partnered lodge, hotel or resort groups and if you use their partnered rentals cars like Europcar and Budget car Rentals.
4. FNB
Johan Maree, CEO of FNB credit cards, says FNB Credit Card customers, who sign up to earn eBucks on their credit card transactions, can spend their eBucks on any flights, hotels and car hire from eBucks Travel. Qualifying customers can also receive up to 40% discount (dependant on eBucks discount level) on Kulula and selected Emirates flights.
“Holders of Platinum FNB Credit and Cheque Cards also enjoy exclusive access to SLOW Domestic Lounges at the domestic terminals of O.R. Tambo, Cape Town and King Shaka International Airport and access to the International Slow Lounge at O.R. Tambo,” says Maree.
5. Virgin Money Credit Card
If you purchase with your Virgin Money Credit Card, you receive 10% discount on any Virgin Atlantic flight from South Africa. To get this discount you will need to purchase directly from Virgin Atlantic(SA) with your credit card. To qualify for this discount you must book your ticket by calling 011 340 3400.
6. Kulula credit card
When you purchase Kulula flights with your Kulula credit card you earn a bonus amount of Kulula points equivalent to 3% of the cost of the flights. Each R1 of Kulula moolah allows a R1 discount on a Kulula flight. You also get 5kg extra baggage allowance, allowing you one piece at 25kg.
7. Mango Vouchers
Mango vouchers are another form of reward with the Nedbank Greenback scheme. Every R5 of eligible spend on a Nedbank cheque card or credit card earns you 1 GB. You get 2 GBs with an American Express Cheque Card or credit card. To earn a R100 Mango flight voucher you need 3500GBs, or to have spent R17,500 on a Nedbank card (or R8750 on an American Express card).
8. Avios travel rewards program
The Avios Travel Rewards Programme allows travellers to collect Avios points on everyday spend at selected stores to use towards flights in South Africa, Europe and worldwide on premium airline, British Airways. With the Avios credit card (issued and supported by Absa) you can earn one Avios for every R10 spent using their Avios credit card, and double Avios points when swiping their cards at partners BP and Pick n Pay. Absa Rewards’ members can also now convert their Absa Cash Rewards into Avios at a redemption rate of R10 for 100 Avios for use towards purchasing flights on British Airways.
Are airline rewards always worthwhile?
As with most loyalty programmes, the secret to getting the most from a frequent flyer programme is to understand the benefits and how you qualify for these.
There are always risks attached as not all air mile schemes last the distance. Recently the sever age of the partnership between British Airways and Standard Bank resulted in BA credit card holders losing their ability to earn mileage rewards from the 31 January 2014.
Daniel Bainbridge, British Airways strategic commercial development manager in South Africa says most programmes are arrayed in tiers. The entry level tiers offer an opportunity to collect rewards when you fly or by using the services of partners such as car hire, hotel or credit card companies. As you advance through the tiers you not only increase your earning capacity, but you also receive service benefits on the ground and in the air.
But he adds that a common misconception is that the more you fly or use partner services, the more you earn and consequently the faster you are promoted through the tiers.
While airlines do want customers to fly regularly, they also want to encourage them to upgrade or pay a bit more for the convenience of being able to change their tickets. To incentivise them to do this, they’ve introduced tier points. These are effectively the ‘bonus points’ which determine how quickly a member will move through the levels of the programme.
“If you fly frequently, but always buy the cheapest, least flexible ticket you’ll still collect rewards but not as many and you won’t progress to the next tier very quickly. On the other hand, if you fly in business class you’ll earn more miles and will also accumulate the tier points which will enable you to advance your status in the programme,” says Bainbridge.
He adds that this can be frustrating for entry level members who may feel it’s taking too long to progress, get service benefits and earn rewards.
Justmoney says:
Check carefully if your card allows you to get free air miles. In the case of Discovery Card holders, you need to first activate this benefit and pay and an additional fee.
When considering a credit card for airline rewards, consider how long it will take you to reap these benefits. With a more expensive card, like the American Express Platinum card, you will earn points faster.
If you are however not a frequent flyer, it would probably be more beneficial to shop around for a cheaper flight than take on the high monthly costs of a credit card.