American Express Velocity Platinum Credit Card

Amex is making sure that it has all bases covered with its American Express Velocity Platinum Credit Card. While thrifty Virgin Australia customers may be attracted by the Amex Velocity Escape Card, truly frequent flyers – for whom both domestic and international travel are a regular occurrence – will be looking for something more. The inclusion of the word ‘Platinum’ in this card’s title is a sure indication that they will find all that they are expecting, with a huge number of bonus Velocity points to ice the cake.

Sorting out the dollars

Let’s get the housekeeping out of the way by crunching the mundane numbers to begin with.

• Minimum income requirement. You’ll need to demonstrate an annual income of at least $65,000.

• Annual fee. Yes, you will pay an annual fee – $375 every year – but if this is the kind of card you are looking for you will understand that some contribution must be made to the cost of the so-called ‘complimentary’ benefits. In reality you are buying extensive insurance, travel benefits and accelerated rewards earning at a heavily discounted rate. It’s a bargain if you can make good use of these privileges, but a waste of money if you can’t. Supplementary cards are provided at no additional cost.

• Balance transfer offer. There’s a balance transfer offer if you need it, allowing you to bring across up to $10,000 from your existing non-Amex card and pay no interest for 12 months. However, you will pay a 1% credit plan establishment fee upfront, the equivalent of slightly more than 1% p.a. in interest (given that you will be reducing the balance with minimum monthly repayments). Add to this the fact that you’ll lose any interest-free days on purchases while you have a balance outstanding (interest will be applied from the date of each individual purchase until your full repayment date) and the offer doesn’t look particularly tempting unless you are currently carrying heavy credit card debt.

• Interest rate. The ongoing purchase interest rate (and balance transfer revert rate) is 20.74%, a typical level for a platinum card. Amex is probably assuming that platinum card users will not be planning to maintain an unpaid purchase balance for long periods. Cash advances are not available on this card, so there’s no cash advance interest rate quoted.

• Interest-free days. You won’t get any long introductory interest-free period on purchases, but, thanks to the monthly billing cycle, you will get up to 55 interest-free days each month (temporarily forfeited if take up the balance transfer offer), much better than the up to 44 interest-free days offered by some competing cards.

Now that you know how much the card is going to cost you, and what other financial incentives or deterrents are involved, it’s time to look at the rewards points, travel benefits and insurance that you will get for your money.

High points earning potential

You’ll earn uncapped points in Virgin Australia’s Velocity Frequent Flyer program when you use your card for purchases, and you can redeem the points for flights and seat upgrades with Virgin and its global airline partners, as well as for other kinds of travel, accommodation, car hire, BP fuel purchases and gift cards or merchandise from the Velocity Rewards Store. Securing award flights is the most productive way to use the points, giving them a redemption value of around 1.3 cents per point, compared with only about 0.5 cents per point if used for gift cards. You can get an even better return on your points by using them for business class fares or upgrades.

The points earning system allows you to earn more points when purchasing Virgin Australia products. Here’s how it works:

• 2.25 Velocity points per dollar spent on Virgin Australia products such as flights and holidays
• 1.25 points per dollar for most other purchases
• 0.5 points per dollar spent with government bodies (ATO, Australia Post, council rates, &c)

This means that you’re getting an extra 0.5 points per dollar on most of your spending when compared with the Amex Velocity Escape Card. If you were to spend a total of $20,000 a year on the card and use the extra 10,000 points for flights, the higher earning rate alone would be worth around $130 per annum.

The absence of any kind of points cap or threshold is also an attractive feature when compared with many competing rewards cards.

Extremely generous 100,000 bonus points

Using the same estimate of 1.3 cents per point (for award flight redemptions), it’s possible to put a value of $1,300 (or six return economy flights between Sydney and Melbourne or Brisbane) on the 100,000 ‘Welcome aboard’ bonus points that you’ll receive for spending $1,000 per month in the first four months of holding the card. That’s a target easily achievable for most cardholders by simply channelling all everyday spending and bill payments through the card.

The way it works is that you will earn 25,000 bonus points in each month that you reach the spending target. So if you miss out in one month, you can still receive bonus points in the other three.

Unfortunately, you won’t qualify for the bonus points if you’ve held any kind of card directly issued by American Express itself in the last 18 months. However, the bonus points will be credited to a new cardholder who is a current or recent holder of an Amex companion card (i.e. a card issued by one of the Big Four Banks as part of a dual account with a Visa or Mastercard).

Travel benefits

• Free flight every year. Amex welcomes you as a new cardholder and then wishes you a Happy Anniversary every year, with a complimentary return domestic economy flight following your first card spend in each 12 month period. The long list of domestic destinations provides a flexibility not matched by cards linked to Qantas, which usually offer complimentary flights between mainland state capitals only. A Virgin return flight between Melbourne and Brisbane is worth at least $293.

• Lounge passes. Each year you’ll get two complimentary single entry passes to the domestic Virgin Australia lounge at selected airports. Depending on your Velocity membership level, lounge access costs at least $300 per year, or $65 for a single visit, so these two passes are worth $130 if you are the kind of traveller who uses and appreciates an airport lounge. You’ll also get two single entry passes to the American Express lounge at Sydney international airport, worth $55 each. That’s a total of $240 per year in lounge pass value.

• Velocity Frequent Flyer status credits

Regular travellers know the value of airline status credits, which help them to maintain elevated membership tiers like Silver, Gold and Platinum. These higher membership levels confer benefits such as priority service, check-in and seating, lounge access and additional baggage allowance. In any year where you spend at least $50,000 using your card, you’ll receive 100 status credits to help you maintain your membership level.

• Complimentary domestic and international travel insurance. You and your family will be covered for emergency medical expenses, flight delays and missed flights or cancellations, transport accidents, personal liability and lost, damaged, delayed or stolen luggage when you purchase your full trip fare with the card or with Velocity points. (Note that supplementary cardholders are not covered unless they are the spouse or child of the primary cardholder, and there’s no rental vehicle excess cover.) This type of multi-trip travel insurance costs at least $430 for a fairly basic policy.

Additional insurance cover

Personal items purchased with the card are covered against theft, loss or damage for 90 days – they’ll be repaired or replaced – and if a retailer refuses to accept return of an unused item within 90 days, Amex will provide a refund instead. It’s difficult to ascribe a price to this kind of insurance, but it can be valuable if you ever need to use it. There’s no extended warranty or purchase price protection insurance, however.

Amex’s award-winning service is also a kind of insurance, providing 24/7 card support worldwide, online fraud protection and emergency card replacement.

Digital wallet

For extra convenience, the card is enabled for contactless payment via your phone or other mobile device through Apple Pay, Samsung Pay or Google Pay.

Cost versus benefit

The annual cost of holding this card is the $375 annual fee.

The annual benefits to which a value can be assigned are:

• Higher points earning rate: $130
• Free domestic return flight: $293
• Lounge passes: $240
• Travel insurance: $430
• Total: $1,093

The purchase protection and refund insurance policies are not included in the above calculation, and the once-only 100,000 bonus points (potentially worth $1,300) are also excluded. But it’s easy to see that this is a card which could deliver a positive financial benefit every year to a frequent flyer who chooses to travel with Virgin Australia and its partner airlines.

The competition

Virgin Australia has its own premium card offering Velocity rewards – the Virgin Australia Velocity High Flyer Credit Card – with a lower annual fee but a much less attractive points earning rate.

Best card for Velocity Frequent Flyers

If you fly regularly with Virgin Australia, you should take a serious look at this card. Check out the various benefits against your own spending pattern and lifestyle, to work out whether the American Express Velocity Platinum Card’s extensive rewards, travel and other benefits will deliver for you. And the 100,000 points boost is a great way to start the relationship.

You can't balance transfer to the American Express Velocity Platinum Credit Card at the promotional balance transfer rate from:

• American Express