“Virgin Money is here to make all Australians better off. Today we’re launching the first in a range of new products starting with two credit cards and an online savings account – all of which are best in class. There is no better time to offer Australians a genuine alternative with simple and fairly priced banking products in an industry where there’s less competition today than ever before. This is classic Virgin territory,”

“Yes, Australia steered itself superbly through the Global Financial Crisis, but unfortunately this came at a price: the elimination of genuine choice. The finance sector in Australia has become highly consolidated and is now dominated by the Big Four, which results in the average Aussie getting less choice.”

Yawn. The second time around the gloss or the shine of Sir Richard’s Virgin brand seems to have become a little tarnished. I mean all the words are there, the sexy young things are there and the fantastic deals are there. Whoa back up there a minute, the fantastic deals? Hmm might check the detail a bit later on that one.

Sir Richard says there’s less competition in the market today. Well duh, when the going got tough, you left sport! You might also recall you sold your old Virgin customers to Westpac?

Why did Virgin leave and will they leave again?

The original products were essentially Virgin badged Westpac products. The original agreement with Westpac ran for 5 years, at the end of which Virgin accepted a short term deal whereby they sold ownership of the customers to Westpac. Valued customers? Too right, you were valued at $39 million or about $78 each. The main reason for leaving would appear to be the lack of profits and the end of that agreement.

The latest products are backed by Citibank under a 10 year deal. You should be worth at least $150 at the end of that deal. Let’s hope at the end of that agreement the card is profitable and a new ongoing agreement is put in place in good time before it comes to an end.

Low Rate and No Annual Fee Credit Cards

The biggest selling point of the Virgin No Annual Fee Credit Card is of course the no annual fee. However, if you actually do use it and rollover any outstanding balances from month to month then despite the lack of an annual fee your fees will add up pretty fast by virtue of the ordinary interest rate.

* This is the Westpac credit card to which the old Virgin credit card holders were transferred when Virgin quit the credit card market in Australia in 2008. Unfortunately, it is not open to new applications.

No Annual Fee Credit Cards

If you do really want a no annual fee credit card then there are other offerings from outside the big four banks, despite what Virgin would have you believe.

Airline Credit Cards

Virgin’s main competitor in the airline market is Jetstar. Let’s compare the two offerings and a Velocity card from NAB.

Whoa on the face of it the Jetstar credit card gives the Virgin a flogging. The interest rate, annual fee, interest free days and balance transfer offer are all better on the Jetstar card.

Pink Credit Card

Unfortunately Virgin isn’t offering a pink credit card option this time around. However, you can have a pink credit card thanks to NAB Low Rate Visa.

Savings Accounts

Aha at last some clear sky for Virgin. The Virgin Savings Account, Virgin Saver beats all of the Big 4 banks with their offering based on interest rates. Just to be sure lets take a closer look. Yep all four of the big banks have inferior promotional and standard interest rates. If it wasn’t for NAB owning UBank, Virgin Money could claim this round too. Whilst Virgin are offering a promotional interest rate that is similar to the interest rate on home loans (a clearly unsustainable strategy), the UBank standard rate is clearly superior.

Conclusion

Now I like Sir Richard, even if he is a Pom nice Englishman and takes his profits overseas, it’s rare to hear him whinge. I reckon, if you invited him over for a BBQ, he’d bring some nice looking people for a swinging good time. However, if you want good value from your financial products have a look around before buying this tired old Virgin marketing exercise thats been around the blocks before.

Disclaimer: Financial product details such as interest rates and fees change without notice. Please confirm all details with the product provider before taking any action. If you need advice you would be wise to consult a Financial Planner.

Two of the major expenses in most household budgets are groceries and petrol. With Australia’s two largest grocery store chains, Coles and Woolworths both offering a credit card with a rewards program and linked petrol savings programs, we take a look at whether getting one of these cards might be a good idea.

Both cards are similar in a number of aspects namely they are not low interest cards and they both offer rewards programs with petrol discounts.

Petrol Discount Programs

Coles Group – Coles Express service stations

When you shop at Coles Group stores and spend more than $30 you will receive a docket at the checkout which contains a Fuel Discount Receipt with a discount of 4 cents per litre. If you also use your Coles Group Source MasterCard you will also be sent via mail with your monthly statement a “Source Fuel Voucher”. You can earn up to four of these each month. The Source Fuel Voucher gives you an additional discount of 4 cents per litre. So when you combine the two of these discounts you can get up to 8 cents per litre discount at Shell Service Stations.

Note that you only qualify for the credit card discount vouchers at Coles, Bi-Lo or Liquorland stores and not Coles Express, Coles online, Liquorland Direct or Kmart. The credit card fuel voucher must be used in conjunction with a ordinary fuel discount receipt and they do have an expiry date. The maximum amount of fuel you can get a discount on is 150 litres at a time.

Woolworths – Caltex Woolworths/Safeway Service Stations

Spend $30 or more at a Woolworths store and you will receive a 4 cents per litre discount Fuel Offer voucher on the docket at the checkout. At the checkout when you present your Everyday Rewards Card the discount voucher details are loaded onto the card. Multiple vouchers can be loaded onto the card and when you redeem them the highest value discount voucher is used first and then the next oldest voucher (one closest to expiry). Vouchers expire after 28 days. You can login online and check voucher details.

To gain an extra 4 cents discount you must spend $5 or more on goods (not tobacco or gift cards) inside the Caltex Woolworths / Caltex Safeway store.

You can link your Everyday Rewards card to the Everyday Money credit card and you will then automatically receive the fuel savings when you pay both with the epump and at the checkout. “epump” is a credit card swipe and pay system exclusive to the Woolworths Everyday Money credit card located on the petrol bowser at most Caltex Woolworths / Caltex Safeway service stations. To use it, you simply hold the Woolworths credit card near the indicated spot on the bowser and then enter your four digit PIN. You must do this first before using the bowser otherwise you will have to pay inside.  Fuel purchased at Caltex service stations using the Everyday Money credit card earn 2 points for every dollar spent.

• Spend more the $30 in Woolies and get the fuel voucher.
• Ditch the dockets – present your Everyday Rewards card and get the voucher entered on to the card.
• Spend more than $5 inside the Caltex Service station to get a further 4 cent discount.
• Link your Everyday Rewards card to your Everyday Money credit card.
• Use the Everyday Money credit card to pay via the epump facility on the bowser to save time by not having to queue inside the servo.

Petrol Savings In Perspective

With petrol savings from 4 cents to 8 cents from both companies, how much could you expect to save? How much petrol do you normally use?

Rewards Programs

Coles – FlyBuys

FlyBuys is the rewards program operated by the Coles Group. It is open to anybody and you can earn 2 points for every $5 spent at Coles Supermarkets, Bi-Lo Supermarkets, KMart, Target, Liquorland, Jetset and Travelworld. At Coles Express stores you can earn 1 point per $5 spent. Whilst at Budget Car Rental the rate is 2 points per $1 spent and at Best Western Australia 1 point per dollar spent.

By using the Coles Group Source MasterCard holders you can earn an additional 2 FlyBuys points per $5 spent.

For example if you spend $200 per week at a Coles supermarket and use your Coles Group Source MasterCard you would earn 160 points.

A $20 FlyBuys Gift Card can be redeemed for 2,500 points. This would take just under 16 weeks to achieve at this spending level.

2,500 points = $20 FlyBuys Gift Card

You can use the points to get Gift Cards (for use at Coles Group companies from $20) as well as a very large range of other goods for the household, entertainment and you can also donate to a number of worthwhile charities (Red Cross, Cancer Council and The Smith Family).

FlyBuys points expire after 3 years.

Woolworths – Everyday Rewards

The rewards for accumulating points with the Everyday Money credit card are shopping gift cards which can be used at Woolies and associated stores.

The points accumulated depend upon what and where you purchase with incentives for shopping at Woolies and purchasing their Select brand.

You get:

3 points for every dollar spent on the Woolies Select products. The Select brand is Woolies premium house brand.
2 points for every dollar spent on non Select Brand products at Woolies / Safeways, epump and associated stores.
1 point for every dollar of purchases on goods at places other than Woolies.

Every 4 months Woolies will send you a shopping card if you have accumulated enough points. The minimum value card they will send out is a $20 shopping card which requires 3,448 points.

If you spend $3,448 over 4 months or $198.92 per week on your card at places other than Woolies you will accumulate 3,448 points over 4 months – this will get you a $20 shopping card ($60 pa).

If you spend $198.92 per week on your card at Woolies, then you would accumulate 6,896 points over 4 months – which will gain you a $40 shopping card ($120 pa).

If you spent 20% of your weekly spend of $198.92 on Woolies Select Brand and the rest on any other brand at Woolies then you would accumulate 7,241 points – $44 ($132 pa).

Woolworths Everyday Money Credit Card

Woolies has two “rewards programs”.  The first is called Everyday Rewards and is essentially a loyalty card with the major benefit that you can link the 4 cent fuel savings voucher to it (by presenting it at the checkout) and therefore don’t need to carry around lots of ratty dockets. It has recently connected to the Qantas Frequent Flyer (QFF) program. You can join the Qantas Frequent Flyer program without paying the normal $82.50 joining fee if you join via Everyday Rewards. You earn QFF points on every dollar over the initial $30 purchase amount (conditions apply).

The second rewards program is attached to the Everyday Money credit card which rewards you with Shopping Cards which can be used at Woolies group stores. The points are tallied every 4 months with the shopping cards sent out via mail. The Everyday Money credit card also allows you to pay for petrol at the pump at Caltex petrol stations instead of having to go to the counter and queue up. It automatically takes into account any fuel discount previously added to your Everyday Rewards card. This is a time saver for those in a hurry although to gain a further 4 cent petrol discount you will need to go into the store and purchase $5 worth of items and pay at the counter.

In the first year the annual fee is $0 but then reverts to $49 per annum.

If you spend around $200 each week in Woolies then you could expect to earn a shopping card of about $40 every 4 months ($120 per year).

If you use about 30 litres of fuel per week and religiously get the full 8 cent discount you could potentially reduce your fuel cost per annum by about $120.

Coles Group Source MasterCard

Coles offer the FlyBuys rewards program which allows you to redeem points for a very wide range of goods. Using the Coles Group Source MasterCard at the same time effectively doubles the rewards points you can accumulate. Whilst the amount of money needed to be spent to get enough points to get a $20 gift card is greater than the Woolies reward program the range of rewards if very large. You can also redeem points for contributions to charities. The credit card also has no annual fee compared to an annual fee of $49 after the first year for the Woolies credit card.

Summary

As straight out credit cards both have high rates of interest and if you do not pay back the full outstanding balance each month then a low interest credit card would probably be a better option. However if you do make full repayments each month and usually spend $200 or more per week at either of these stores then you can benefit from using one of these cards. The major reasons for having these cards are the petrol savings and the credit card reward programs.

Both rewards programs have an option to redeem points for gift cards. The amount of money you need to spend at each of the respective stores using their respective credit cards in order to get a $20 gift card is $1,724 from Woolies and $3,125 from Coles. Whilst the rewards are restricted to gift cards with Woolies, the Coles FlyBuys program has an extensive range of items for which you can redeem your points.

You need to factor in the cost of the annual credit card fee. The Coles Group Source MasterCard has no annual fee whereas the Woolworths Everyday Money card has an annual fee of $49 which is waived for the first year.

Whether these credit cards are worth getting is totally dependant on your individual situation. You need to do the sums and work out how much you normally spend at these stores and on petrol and then work out what the benefits could mean for you.

Warning: Financial product features can change without notice. Please confirm all details with the product provider before taking any action.