Star Alliance Debuts First Co-Branded Credit Card in Australia

Earlier this year, it was announced that Star Alliance intended to release a co-branded credit card by the end of the year. The most intriguing aspect of the Star Alliance credit card is that the points earned would be transferrable to different Star Alliance partners.

The HSBC Star Alliance Credit Card is now available for applications in Australia. The full details of the card have been released, and it’s a very intriguing concept.

Let’s take a look at the particulars from this groundbreaking offering.

The HSBC Star Alliance Credit Card

In May 2022, Star Alliance announced its intention to launch its very own co-branded credit card. This was set to be a first amongst airline alliances, providing access from a single points currency to loyalty programs across its member airlines.

Having such flexibility with earning and redeeming points for an airline alliance is unprecedented. The points earned from a single Star Alliance credit card could theoretically be redeemed with many Star Alliance airlines’s loyalty programs.

In partnership with HSBC, we now know that Star Alliance has debuted its first co-branded Visa credit card in Australia. The card is known as the HSBC Star Alliance Credit Card.

HSBC is a natural partner for Star Alliance, as it operates in many markets where Star Alliance carriers are also based. This includes Canada, the United States, Germany, and Singapore.

There are currently no Star Alliance airlines based out of Australia, which is perhaps why Star Alliance chose to debut its first credit card there. As there are many co-branded credit cards from member airlines in their own territory, choosing Australia could be seen as a measure to not interfere with any Star Alliance airline’s loyalty program.

In Australia, the card will have a $450 (AUD) annual fee, which is waived for the first year.

The points earned through credit card spending will be known as “Star Alliance Points”. It’s not often that a new points currency is created, so it’s exciting to think about how Star Alliance Points will develop over the near future.

The earning structure for the Australia-based card is as follows:

• Earn 1 Star Alliance Point per dollar spent on eligible purchases, up to $3,000 AUD per statement period.
• Earn 0.5 Star Alliance Points per dollar spent on eligible purchases thereafter.

Star Alliance Points can be converted to loyalty programs from seven member airlines, who have signed on as launch partners. All of the initial partner airlines operate flights to Australia from their respective countries.

Star Alliance Points can be converted at a ratio of 1:0.8 to the seven loyalty programs. This equates to the following transfer ratios:

• Air Canada Aeroplan: 1 Star Alliance Point = 0.8 Aeroplan points
• Air New Zealand Airpoints: 1.25 Star Alliance Points = 10 Airpoints Dollars
• EVA Air Infinity MileageLands: 1 Star Alliance Point = 0.8 Infinity MileageLands miles
• Singapore Airlines KrisFlyer: 1 Star Alliance Point = 0.8 KrisFlyer miles
• South African Airways SAA Voyager: 1 Star Alliance Point = 0.8 SAA Voyager miles
• Thai Airways Royal Orchid Plus: 1 Star Alliance Point = 0.8 Royal Orchid Plus miles
• United MileagePlus: 1 Star Alliance Point = 0.8 MileagePlus miles

This represents an earning ratio of 0.8 miles per dollar spent up to $3,000 AUD, and 0.4 miles per dollar spent after $3,000 AUD per statement period.

Keep in mind that the credit card market in Australia isn’t comparable to those in other markets, such as Canada or the United States. For example, Amex MR points in Australia have a transfer ratio of 1:0.5 for KrisFlyer, so the earn and redemption rate on the HSBC Star Alliance Credit Card is superior for the first $3,000 (AUD) spent each month.

Interestingly, upon signing up for the HSBC Star Alliance Credit Card, you’ll select a “Status Airline”, to which your Star Alliance Points will be converted and credited automatically each month.

For example, if you chose Singapore Airlines as your Status Airline and you were to earn 3,000 Star Alliance Points in a single month, you’d wind up with 2,400 Singapore Airlines KrisFlyer miles being automatically deposited upon your statement date.

This suggests that Star Alliance Points aren’t necessarily a universal points currency that you’ll have the flexibility to deposit into different loyalty programs, as can be done with American Express Membership Rewards. Rather, it appears that you can choose from the seven participating Star Alliance airlines to earn miles in, but not multiple programs at once.

As there are different sweet spots within each program, you could choose to credit your Star Alliance Points to Singapore Airlines KrisFlyer, with the goal of flying in Singapore Suites. In conjunction with transferrable points from another loyalty program, such as American Express Membership Rewards in Australia, you’d be able to combine efforts to attain your dream redemption.

Similarly, you could find yet another avenue to earn Aeroplan points, which could give your account balance a boost. For Australians, this could mean keeping an eye out for preferable promotions to buy Aeroplan points, and then supplementing the earning with points earned through the HSBC Star Alliance Credit Card.

Fast Track to Star Alliance Gold

Perhaps the most valuable benefit from the HSBC Star Alliance Credit Card is you can easily get Star Alliance Gold status after spending $4,000 (AUD) in the first three months of being a cardholder.

The status can be maintained each year by spending at least $60,000 (AUD) in each cardholder year. While the spending requirement is indeed a bit steep, if you’re able to meet it, it represents a very easy way to maintain status without ever stepping foot on an airplane.

You’ll earn Star Alliance Gold status through the Status Airline that you’ve selected to earn points in. For example, if one were to select Air Canada as your airline, you’d earn Star Alliance Gold through Air Canada, which is equivalent to holding Aeroplan 50K Elite status.

Star Alliance Gold status unlocks great perks such as global lounge access, extra baggage, and priority airport services when flying with other Star Alliance airlines in any class of service.

From the Australian perspective, keep in mind that other airlines, such as Air Canada, Singapore Airlines, and United, have reciprocal agreements with Virgin Australia. So, by choosing one of these three airlines as your Status Airline, you’d enjoy domestic lounge access in any class with Virgin Australia, as well as priority check-in.

Other Perks with the HSBC Star Alliance Credit Card

Other perks announced for the Australian HSBC Star Alliance Credit Card include:

• Domestic and international travel insurance
• Rental vehicle excess insurance in Australia
• Transit accident insurance
• Extended warranty & purchase protection insurance
• 0% interest for six months on flight bookings made directly with Star Alliance member airlines, paid for with the HSBC Star Alliance Credit Card.

With an annual fee of $450 (AUD), it’s no surprise that there will be a suite of insurance coverages and purchase protections. 

What’s most interesting, though, is the 0% interest for six months on flight bookings made directly with Star Alliance member airlines. I’m sure that this feature will be very useful for some cardholders, allowing for a longer time to pay off the flights for a trip without incurring any extra interest.

Star Alliance has confirmed that there are no plans for any form of the Star Alliance Credit Card to move into other markets at this time, and in particular, any markets where a Star Alliance airline is based. While we’re all intrigued by this concept, don’t expect to find a similar product in Canada, the United States, Germany, Singapore, Thailand, or Japan anytime soon.

Conclusion

Star Alliance has announced the first market in which it will release a co-branded credit card. The HSBC Star Alliance Credit Card is set to roll out in Australia, and is already open for applications.

Star Alliance has also confirmed that the points earned with the credit card will be known as Star Alliance Points, which can then be credited to seven Star Alliance member airline loyalty programs. The transfer ratio for Star Alliance Points to member airlines is 1:0.8, which opens the door to earn points in some programs that are otherwise inaccessible to Australians. 

The card also includes an easy fast track to Star Alliance Gold status through credit card spending, and a suite of other perks. A very interesting cardholder benefit is having 0% interest for six months for flight bookings made directly with Star Alliance member airlines.

This is a very intriguing concept, and it’s the first such financial product amongst any global airline alliances. We’ll be keeping a close eye out to see how it’s received by our friends down under.