CBA Overhauls Loyalty Program: 9 Million Customers Shift to Yello Points on October 1

Commonwealth Bank announced a sweeping overhaul of its loyalty program on Tuesday, introducing a new Yello points currency and shifting its airline partnership from Qantas to Virgin Australia. The move affects more than 9 million customers and takes effect October 1. The change is forced by the Reserve Bank’s ban on credit card surcharges, which previously funded premium perks like frequent flyer points. CBA hopes bundling incentives will replace lost surcharge revenue.

Why CBA is ditching Qantas for Virgin

The Reserve Bank banned credit card surcharges from October 1, removing a key funding source for rewards programs. CBA’s new Yello scheme will offer more generous conversion rates for Virgin Velocity points than for Qantas Frequent Flyer, effectively pushing customers toward Virgin. The bank has not disclosed the exact point conversion rates yet. Customers will learn how many Yello points they need for each airline closer to October 1.

How the new Yello program works

Yello lets customers earn points on everyday banking including home loans, savings, insurance, and credit cards, then redeem them on groceries, utilities, fuel, or travel. Customers who bundle multiple products with CBA earn more points than single-account holders. The bank also introduced a new premium charge card with higher point-earning rates, no international transaction fees, airport lounge access, and travel insurance.

What this means for Qantas loyalty members

CBA customers currently earning Qantas points will see diminished earning potential under the new scheme. The bank has not revealed exact conversion rates between Yello and Qantas Frequent Flyer. Canstar director Sally Tindall warned that while earning points on more banking products sounds appealing, customers should verify the maths before switching accounts or products solely for rewards.

The broader banking sector shift

Westpac also announced fee hikes and cuts to credit card benefits this week, citing the same surcharge ban. The Reserve Bank’s reforms include both the surcharge ban and a cap on fees. CBA and other banks are now relying on bundling incentives and higher-tier card products to retain customers as traditional surcharge revenue disappears.

Final Thoughts

CBA’s Yello launch marks a fundamental shift in how Australian banks fund rewards. With Meyka grading CBA a B and the stock down 2.7% today, the program redesign reflects industry-wide pressure from regulatory reform. Customers should compare conversion rates before October 1.

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