Frequent flyer cards vs bank rewards points

The card that earns the most points per dollar isn't always the one that gets you the most flights. What matters just as much is the kind of points it earns, and where those points can go.

Rewards cards in Australia fall into two camps: frequent flyer cards that earn airline points directly, and bank rewards cards that earn the bank's own points for you to transfer later. Here's how each works, what you give up, and what the 2026 card reforms change.

The two types at a glance

Frequent flyer cards earn Qantas Points or Velocity Points directly. Every purchase lands straight in your airline account.

Bank rewards cards earn the bank's own currency, such as American Express Membership Rewards, CommBank Yello or NAB Rewards. You transfer those points to an airline when you're ready to book, often to a choice of several.

Frequent flyer cards

These suit you if you've already picked a main program and want simplicity. There's nothing to manage: spend, and the points appear.

The trade-off is that you're locked to one airline. If Qantas raises reward prices or Velocity drops a partner, you have no way to move your points elsewhere. Some bank-issued frequent flyer cards also charge an extra yearly fee to earn airline points, on top of the card's annual fee, so check the full cost before you apply.

Bank rewards points

These suit you if you want options. Transferable points let you wait until you know where you're going, then move them to whichever airline has the seat.

The headline earn rate can be misleading, though, because of the transfer ratio. A card earning 2 bank points per dollar that transfers at 2:1 earns the same as a card earning 1 airline point per dollar. Always convert the earn rate into airline points before comparing.

Ratios also change. Two recent examples:

• CommBank Yello replaced CommBank Awards on 1 October 2026. Yello points transfer at 3:1 to Qantas, 2.5:1 to Avios and 2.5:1 to Velocity, down from 2:1 to Velocity under Awards.
• St.George Amplify worsened its transfer rates to Velocity and KrisFlyer on 30 September 2026.

One more quirk: American Express Membership Rewards transfers to Velocity from every eligible Australian card, but only selected premium Amex cards can transfer to Qantas.

What the RBA reforms change

From 1 October 2026, the Reserve Bank capped the interchange fee on consumer Visa and Mastercard credit cards at 0.3%. Interchange is the fee a shop's bank pays your card issuer on every purchase, and it has long helped pay for points.

With less of that money coming in, expect banks to keep trimming earn rates, sign-up bonuses and transfer ratios on Visa and Mastercard rewards cards. Two parts of the market have moved less so far: American Express isn't strictly bound by the cap and hadn't announced earn or transfer cuts as of early October, and business cards keep a higher 0.8% cap. Some banks have already acted: NAB and MyCard moved their Velocity transfers to 3:1, and Westpac's Altitude Rewards moved to 4:1. What the RBA reforms mean for your points explains it in full.

Why banks run their own points

Here's the part most comparisons skip. A bank that issues airline points directly has to buy every point from the airline at the airline's price. A bank that runs its own currency controls the cost: it sets the earn rate, the transfer ratio and the partners, and it can change any of them without asking an airline.

That control is why bank programs exist, and it's why their transfer ratios move when the bank's costs move. It also explains the recent wave of changes. When interchange revenue falls, a bank with its own currency can adjust a ratio overnight. A bank selling airline points has to renegotiate a contract.

How to choose

1. Know your main program. If you'll only ever use Qantas or only Velocity, a direct-earn card keeps it simple.
2. Convert every earn rate into airline points using the transfer ratio before you compare cards.
3. Count every fee, including any separate frequent flyer program fee.
4. Pay the full balance every month. Interest wipes out the value of any points you earn.
5. Expect change. Earn rates and ratios are moving in 2026, so check the current terms before you apply.

New to points? Start with Loyalty points in Australia: a beginner's guide. Want to see where bank points can go? Read Points transfer partners: every Australian program mapped.