Credit Cards – can you afford your reward?

What’s the real cost of frequent flyer miles or cashback points using a rewards credit card?

We’ve all fallen for the promise of free, see-through kitchen scales paid for by credit card rewards points, magical points. Because, let’s face it, we all know the allure of something for nothing, whereas the exchange rates for credit spend, points earned and rewards purchased are anything but transparent. So are you getting value for rewards points?

On behalf of everyone whose free return flight to Dubai is looking more like Dubbo, Mozo has cracked the rewards credit card code, to reveal the true value of all those points, cashback deals and discount programs.

The results are kinda scary, so deep breath.

We thought the main difference between the 100-plus different rewards credit cards would be how many toasters / flights / gift cards you get for your annual credit spend. But in many cases, the points expire before you can cash them in, or the rewards offered takes years to attain; worse still, the value of rewards earned is often less than the annual fee.

So how do you beat the rewards card market? Well, it all depends on your credit card spend — but our new Rewards Revealer lets you plug in your numbers for a personal solution. And you’ll find the results are wildly different for flights, giftcards and cashback offers.

If you spend $15,000 a year, the best rewards cards (determined by the value of rewards minus annual fees) are:

for gift cards: Myer Visa Card — $111
for cashback: American Express Blue Sky Credit Card — $103
for domestic flights: Jetstar Mastercard — $101
for international flights: Westpac Earth — $100

Whereas for $50,000 a year, it’s a completely different story:

for international flights: Citi Emirates Platinum — $1,021
for domestic flights: Jetstar Platinum Mastercard — $851
for gift cards: ANZ Rewards Gold — $621
for cashback: Westpac Altitude Platinum — $603

Remember, the interest rates on rewards credit cards nudge up to an outrageous 20%, so unless you pay off the whole balance every month, you’re unlikely to benefit from a rewards card.

Why not check out where your credit card ranks, or who gives you the most covetable appliances a year?

Get to the points at http://mozo.com.au/credit-cards/rewards.

Credit Cards – can you afford your reward? was last modified: June 13, 2012 by Mozo

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  1. I’d like to agree and slightly disagree at the same time. In saying that there definitely is a strong benefit to owing a credit card. But at the same time, as we all know, if you not clear on how to use these cards then one can get themselves into deep trouble.

    Its a fine line in between, one which I always seem to struggle with.

    From a team as experienced as you, I think it would be good to hear if you have any strong ideas on how to manage this. I know each indivdual is different, but it would be very interesting to hear what research you partake in with this, what observations you make and what ideas your propose.

    Just a thought…

    Cash Saving Queen

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