Earlier this year we cracked the rewards code to reveal the value Australians were getting for their money with rewards credit cards with the launch of our Rewards Revealer tool. Today, consumer advocacy group, CHOICE, launched the 2010 CHOICE Shonkys, awarding the Commonwealth Bank Awards program a Shonky for low flying jest.
CHOICE singled out the Commonwealth Bank for its shonkiness in how the points are calculated for cards linked to the Qantas Frequent Flyer program. Unlike other rewards credit cards where one rewards point equals one Qantas Frequent Flyer Point, with the Commonwealth Bank card you only earn points at half the rate. It means you have to spend double the amount of money to earn the rewards.
The Shonkys, reminded us here at Mozo HQ of just how important the Rewards Revealer is, and so we decided to take this opportunity to take a look (and highlight) some other shoddy practices and unrewarding rewards programs.
Based on a $12,000 annual spend the three worst performing rewards cards are:
|Card||Annual rewards value minus fees|
|NAB Gold Card||-$90|
|American Express Qantas American Express Premium Card||-$74|
(excluding platinum cards)
Rewarding? Maybe for the banks but certainly not us consumers.
With the NAB Gold Card to earn you a flight from Sydney to London you’d need to spend a mind blowing $937,500 and that’s not the biggest catch. Points expire after 36 months, so unless you are planning on buying a house on your credit card, it’s virtually impossible to accrue enough points to redeem the flight before they expire.
But even more telling is that it’s not just a handful of rewards credit cards that will put you in the red. Of the 71 standard rewards cards in the market, 35 will cost you more than they return in rewards value each year (at $12,000 annual spend after the annual fee).
So, what can you do to ensure you get value from your rewards card? Here are our top tips:
1. Make sure you are earning more in rewards than you are paying in annual fees
2. Always pay off your card in full each month to avoid high interest rates
3. If you have a credit card debt, switch to a low rate card instead
Compare rewards credit cards at mozo.com.au