If you have a rewards credit card burning a hole in your wallet and a free flight or shopping trip on your mind, it’s time to think about how you’re going to rack up juicy rewards points without racking up debt.
Here are five moves from the masters of rewards redemption to help you get the biggest bang from your rewards program:
1. Learn your card’s bonus partners
The fastest and easiest way to boost your rewards balance is through bonus points offered on items from your card’s bonus partners. You might be surprised to find that you can earn rewards on flights, movie tickets, jewellery and cosmetics. For instance the ANZ Rewards Platinum allows you to earn bonus points at over 30 bonus partners that include Hoyts and Prouds the Jewellers. Just don’t get tempted to spend more than you normally would!
2. Grow your points with a joint rewards card
Many rewards credit cards allow additional card holders for family members, which are then linked to your rewards program. You know the saying: “many hands make for light work”, so the more people spending on your credit card, the quicker your rewards point growth. Keep in mind some providers charge a small fee for an extra card.
3. Pay for everything on your credit card
If you’re a super disciplined money manager consider using your rewards credit card to pay for all your everyday expenses, then at the end of the month pay off the balance in full. That way you’ll accelerate the amount of rewards points you earn, without falling into credit card debt.
4. Redeem top value items
While your credit card might give you plenty of options for redeeming rewards, a pro knows not to waste valuable rewards points on low value products. Mozo’s money geeks found (in the Experts Choice Awards for rewards credit cards) that the value of redeeming rewards points on a domestic flight far outweighed the value of purchasing a gift card. For example, with the NAB Velocity Rewards Premium Card based on a $17,000 yearly spend you could redeem $293 worth of one-way Sydney to Melbourne flights, whereas once the credit card’s $150 annual fee was taken into account you would be in the red by $8 redeeming a $100 gift card. For the full rundown read our flights vs shopping blog.
5. Earn them and blow them
There’s nothing worse than saving up rewards points only to discover they have expired before you could use them, so make sure you know the expiry date and redeem them as soon as you can. Big spenders also keep in mind your card may have a cap on the amount of rewards you can earn. Alternatively, the best option is to sign up with a card with no expiry date and limitless points like Mozo’s Experts Choice winner the American Express Velocity Escape Card.
More helpful card tips
Mastering the rewards point redemption game is one thing but don’t forget to follow the golden rules to avoid credit card debt:
1. Establish a budget. Before hitting the shops or escaping on holiday with your rewards credit card make a clear budget and stick to it. Use Mozo’s budget calculator here to avoid the slippery slope of credit card debt.
2. Always pay your balance off in full each month. A rewards credit card might be a good way to get something for nothing, however accumulating debt will eliminate any value the rewards points could have had, so always make sure you pay the balance off in full by the due date.
3. Don’t use cash advances. Withdrawing money from an ATM using your credit card is always a bad idea, as you’ll incur the higher cash advance rate immediately.