American Express has begun writing to cardholders of various corporate cards that the points earn rate on expenditure at governement bodies, such as the Australian Tax Office, will be reduced from 1 July, 2015. The new earn rate at governement bodies will be half the current earn rate.
Telecommunication payments will also be affected by the changes, with the earn rates also being halved.
The earn table in the FAQ on the American Express website shows how the earning structure is changing. Earn rates for Corporate Cards enrolled in Membership Rewards Choices and Ascent is shown below. For holders of cards that utilise the Spirit program, the following table also reflects the earn rates in the spirit program (see the Spirit program FAQ)
|Spend Category||AUD||Points Earn Rate to 30 June 2015||Earn rate from 1 July 2015|
|Travel & Entertainment Expenses||$1||1 MR Points||1 MR Points|
|Other Business Commodities||$1||1 MR Points||1 MR Points|
|Insurance Providers (except issued by American Express)||$1||0.5 MR Points||0.5 MR Points|
|Utilities Providers||$1||0.5 MR Points||0.5 MR Points|
|Telecommunications Providers||$1||1 MR Points||0.5 MR Points|
|Government Bodies||$1||0.5 MR Points||0.25 MR Points|
It is the final lines of the table that tells the tale. The points earn rate for spend at governement bodies will be reducing from 0.5 points per dollar to 0.25 points per dollar. This new earn rate kicks in from the start of the new financial year.
The other affected category in these changes is the telecommunication providers, that are seeing their earn rates cut by half, from 1 point to 0.5 points per dollar.
Government Bodies appears to be a catch all across all levels of governement, taking in the federal, state and local givernment bodies. The government bodies particularly called out by American Express includes the Australian Tax Office and Australia Post. This may be due to the significant amount of money that may be put through these two government bodies by holders of American Express cards.
The reduction a few years ago to just 0.5 points per dollar was though at the time to be quite a cut in eanrings. The latest round of cutbacks, to just 0.25 points per dollar, is just as harsh. For people making ATO payments, the comparitiveley high surcharge for American Express cards over Visa or Mastercard may make this an expensive way of gaining points.
Do note however, that these changes only affect the rewards programs of American Express issued corporate cards, Any bank issued cards would not be affected by these changes.