National Australia Bank is closing its credit card rewards scheme, NAB Gold Rewards, and will transfer members into third party rewards programs.NAB is offering credit card customers a choice of Qantas Frequent Flyer, Velocity (the Virgin Blue program) or FlyBuys (a business in which the bank is a joint venture partner with Coles).The bank started writing to customers late last year to notify them of the change. In April NAB will start reducing redemption options but the program will remain open until all customers have been transferred to one of the third party schemes.NAB's move to shut Gold Rewards is a response to changes in the reward scheme market. Last year Qantas Frequent Flyer announced that that it wanted to deal directly with participants in its rewards program rather than through credit card issuers. Under existing arrangements cardholders earned points in their card issuer's rewards program and then elected to have some or all of them transferred into their QFF account.Qantas said this arrangement lacked transparency, was complex and created a situation where conversion rates varied from one card issuer to another. Its solution was the introduction of a "direct earn" system, which means that QFF participants will have points earned on their credit card spending accrue frequent flyer points directly. QFF set a deadline for program members to decide what they wanted to do with their accrued points.Members of the QFF program have until the end of March to decide whether to transfer their points from their credit card rewards program into their QFF account. From April 1 members will have to use a card that is directly linked to QFF to earn Qantas frequent flyer points on their credit card spend.To facilitate this change card issuers have adopted one of three options: issue new cards offering only the Qantas program; give card holders a choice of programs with their existing cards; or migrate all card holders into the QFF program.A NAB spokesperson said the bank's view was that the QFF program offered better rewards value for its customers. Redemptions for QFF points has been the dominant redemption chosen by NAB Gold Rewards members.Credit card industry analyst Mike Ebstein, of MWE Consulting, said NAB's decision to offer only third party reward programs reflects the strong position that airline programs hold in the rewards program market. Members of programs such as QFF, Velocity and Skywards (the Emirates program) can aggregate points from flights, hotels and other partners with points from their credit card spend to earn rewards more quickly. Members of card issuer reward programs cannot aggregate their points in the same way because airline points cannot transfer into card issuer schemes.QFF has enhanced the strength of its offer by launching Qantas Store that offers non-flight rewards and vouchers. The NAB spokesperson acknowledged this, saying the range of awards QFF offered was superior to what was on offer through NAB Gold Rewards.Ebstein says it is a logical move but one that carries some risk and cost. Under an arrangement where