Rewards cards may entice you with promises of juicy points that will see you jetsetting around the globe in no time but our experts have found that the average rewards credit card is barely getting you off the ground delivering just $7.30 in value each month.
We compared 115 rewards cards and found the reason for such a measly return on your coin is because most cardholders don’t spend enough to outweigh the cost of the card’s annual fee, which can soar as high as $749.
Want an example? One rewards card we looked at had such a high annual fee that a cardholder would need to spend $40,000 per annum to break even (yikes!).
It might all sound a bit doom and gloom but thankfully there is hope for Aussie spenders. Just read this comparison:
While the average cardholder who spends $18,000 a year will only receive $88 from their rewards points per annum, if they switched to the NAB Velocity Rewards Premium Card, which was found to be the best value rewards credit card in our database, they would receive $382 worth of value. That’s a difference in value of $294!
Here’s the full list of rewards cards that offer the goods when it comes to rewards value:
|Australia’s most rewarding credit cards 2015 – annual spend of $18,000|
|Annual rewards value||Annual fee||Net annual value|
|1.||NAB Velocity Rewards Premium Card||$532||$150||$382|
|2.||American Express Velocity Escape Card||$355||$0||$355|
|3.||American Express Qantas Discovery Card||$340||$0||$340|
|4.||ANZ Rewards Platinum||$473||$149||$324|
|5.||NAB Qantas Rewards Premium Card||$510||$250||$260|
|6.||NAB Velocity Rewards Card||$355||$95||$260|
|Source: Mozo.com.au Excludes introductory and bonus points offers. Where both American Express and Visa/MasterCard are issued per account, calculations assume 100% of spend is on American Express.|
Top tips for racking up rewards points
1. Look for rewards credit cards linked to airline programs. Mozo’s experts found when comparing the cards on offer that the best value for money was offered by rewards cards that were tied to airline points’ schemes.
2. Redeem on flights over cashback. Another finding from our research was that generally flights, in particular domestic flights offer the best value over gift cards and cash back.
3. Check the points earned per dollar. Many rewards cards come with two networks in the one card e.g Visa and AMEX. So check which offers the higher points per dollar spent and choose that option at the checkout.
4. Check the annual fee. As mentioned often a high annual fee will negate the benefit of the rewards earned. So unless you’re a big spender, look for a card with a low yearly fee.
5. Diligently meet your repayments. Rewards credit cards often have high interest rates attached. In fact our database showed the average rate is 19.73%. So make sure you always pay your balance in full each month (and on time) to avoid a high rate and late payment fee.
6. Check points cap and expiry. There’s nothing more annoying than racking up rewards points only to find they have expired or there’s a limit on the amount you can earn. So always check these features to ensure you’re with the best rewards card for your spend.
And to really make sure you are getting the best value for your annual fee, take advantage of all the free perks that come with your card, such as travel insurance and concierge.
Want to find the best rewards card for you? Then punch your details into our rewards revealer calculator or see the full list of rewards cards that got the nod of approval in the Mozo Experts Choice Awards.