It’s that time of the year again, when Mozo lifts the lid on Australia’s credit card rewards programs to find out which rewards credit cards deserve a spot in your wallet, and which ones deserve a place in the bin.
We’ve crunched the stats on flight, shopping and cash back rewards and the results are now in. They’re kinda scary, so take a deep breath…
Annual fees on rewards credit cards have increased sharply over the past two years from $126 in 2010 to $152 in 2012, while the annual value offered by rewards programs on average has remained the same, or even declined. Of the 67 standard rewards cards (non-platinum) we reviewed, only 5 cards offered over $100 in rewards value each year, after the annual fee.
Worse still, 20% of the standard rewards cards on the market will leave you worse off, charging more in fees than delivering value in rewards.
Best rewards cards
If you spend $16,000 a year, which by the way is the average annual spend of Australians according to the RBA, the best rewards card (determined by the value of rewards minus annual fees, excluding platinum cards) are:
Offers a tasty $169 in net annual rewards value, and links directly to the Qantas Frequent Flyer program
Gives you a nice $111 in net annual value and links to the popular FlyBuys program
Fly high with $109 in net annual value, linked to the Velocity Frequent Flyer program
$108 in net annual value with loads of rewards options from flights to shopping
$101 in net annual value with Australia’s great value airline, Jetstar
Mozo’s rewards cards tips
1. Match your card to your rewards – if you don’t fly regularly you might be better off with a shopping rewards card aligned with a retailer rather than a frequent flyer rewards card.
2. Don’t let points expire – and watch rewards cards with restrictive points caps, particularly if you’re a big spender.
3. Always pay your credit card balance in full each month – those rewards will be eaten up by high interest rates if you don’t.
4. Shop with bonus partners to earn extra points but don’t forgo cheaper prices elsewhere in the pursuit of future rewards.
MORE in this month’s MoneyZone:
There are so many options out there for home loans and savings accounts – have you shopped around recently? Here are some of our top picks.
Mozo has pretty much reinvented the wheel with this one. Check out our alternative to the budget – a spending plan that helps you afford almost everything you want and need!