Joining NAB and ANZ, Westpac’s announcement to drop its American Express (Amex) companion cards falls in line with other banks’ reactions to the RBA’s cap on interchange fees that primarily affect Amex companion cards issued by banks.
Since the RBA announced it would apply a cap to all surcharges, restricting credit card interchange fees to not exceed a maximum of o.80%, Canstar’s Research team has seen NAB, Westpac and Commonwealth Bank all cut earn rates on their Amex companion cards.
But in a move that is unique from the other big banks, Westpac has signed a deal with Amex to introduce two new cards issued and serviced directly by Amex, available exclusively to “eligible Westpac cardholders”.
Canstar’s Group Manager of Research and Ratings, Mitch Watson, said the introduction of these new cards is good news for the bank and its customers.
“Fans of the higher points earning potential that is usually associated with American Express cards can breathe a sigh of relief,” said Mr Watson.
“As these cards will be issued by American Express, and not an Australian bank, they will not be subject to the RBA’s regulations that came in to effect on 1 July 2017.
“This development is effectively a creative way to navigate around the RBA’s regulations and is positive news for consumers who collect rewards points.
“These new products will allow consumers to continue to earn rewards points into their existing rewards accounts and include the additional benefits that come with an Amex card, such as uncapped points, complimentary insurances, and other American Express benefits.”
The new cards will be available to apply for from early 2018 and will be separate to current credit card accounts held with Westpac, having its own credit limit and statement.
Westpac is yet to announce specific fee and earn rates for the new rewards cards.
Existing Westpac-issued Amex cards will be closed from 4 April 2018, but the benefits currently available will remain for consumers who take out the new cards.
Commonwealth Bank remains the only one of the majors left to cut its Amex companion cards.