CBA revamps card fees and rewards

Commonwealth Bank will offer a substantially revised portfolio of credit cards from October 23 with the emphasis on increasing share of wallet by recognising established customer relationships with fee discounts, rather than chasing market share.
 
Customers with another CBA product will pay $30 less on annual fees than card-only customers and, in some cases, will have their annual fees waived.

CBA head of cards Stephen Karpin said: "We have a lot of customer relationships. We don't need to engineer products that are going to win people to the bank.

"We have designed our new offer for our customers. We recognise that there are things we can do better for them."

The bank has added new cards to each of its three segments - rewards, low rate and low fees.

In the rewards segment it has added American Express companion cards - the last of the big banks to do so. Users of standard, gold and platinum Master and Visa cards will be offered Amex and all new card customers will receive MasterCard and Amex (CBA has Visa and Master on issue but has a preferred relationship with MasterCard and all new cards will be MasterCard).

The interest rate on reward cards is 18.99 per cent (highest among the big four), with 55 interest-free days (matched only by ANZ on gold and platinum).

Rewards are one point for every dollar on Master and Visa, 1.5 points per dollar on standard Amex, two per dollar on gold Amex and three per dollar on platinum.

Westpac is the only other issuer to offer three points for a dollar, on its Altitude Platinum Amex.

The platinum annual fee comes down from $280 to $250 for established customers, gold from $144 to $114 and standard from $89 to $59.

Unlike ANZ, which removed points caps for many customers when it launched its Amex companion card range in July, CBA will maintain caps (to stop business owners gaming the system) but will increase them.

In the low-rate segment the bank's existing offering is a standard card with an 11.74 per cent interest rate and $78 annual fee ($48 with the discount). It is adding a low rate gold card that will include higher credit limits and travel insurance. The fee is $120 (discounted to $90).

Karpin said: "Customers told us they wanted more spending power and some travel benefits."

The maximum credit limit on the standard low rate card is around $20,000 and will go up to around $50,000 on the gold card.

In the low-fee segment CBA has offered a card with an 18.49 per cent rate, 55 free days and a $24 fee. It will introduce a low fee gold card with some added features.

Established bank customers will have their low rate card fees waived if they spend $1000 a year on the standard card and $10,000 on the gold.

Karpin conceded that CBA did not have the best credit card products in the market. He said the new range would reward customer loyalty and also give card holders some options for upgrading their card accounts.