Aussies ready to ditch rewards credit cards as value tanks
Everyone loves to think they’re getting something for nothing, but according to a recent survey conducted by Mozo, Aussie spenders aren’t that happy with the value they’re getting from rewards credit cards - and for good reason.
The survey found that three out of four Aussies have at least one rewards card, but 65% of those spenders said if rewards value dropped any further, they would cancel their card. 34% of respondents had already axed a low value rewards card.
“More and more Aussies are willing to ditch cards that aren’t pulling their weight as the value of rewards programs declines,” said Mozo Director Andrew Duncanson.
“Cardholders now need to spend nearly $20,000 a year just to score a $100 gift card, which is $1,789 more than two years ago.”
“Banks have long relied on interchange fees to fund expensive rewards programs, however with the Reserve Bank capping fees we have already seen card providers slash the value of rewards cards,” Duncanson said.
“We expect banks will become increasingly stingy with rewards points as they turn to other incentives to lure customers in, such as free travel credits, frequent flyer lounge passes, and cashback offers.”
The annual fee on rewards credit cards can be as high as $750, and averages $177, which is a massive four times higher than the average non-rewards card fee. As for interest rates, rewards cards weigh in at an average 19.78%, while non-reward cards average 14.10%.
“The reality of most rewards credit cards now is that unless you’re a really big spender, and can afford to pay off your balance in full each month, you’re simply not able to earn enough rewards to outweigh the high annual fees and interest rates on these cards,” Duncanson said.
“So think about whether you’ve seen any actual benefits from your rewards program - and if not, it might be time to switch to a different, better value piece of plastic.”
Best value rewards cards
So if you’re looking for the best value rewards scheme for your spending, head over to our Rewards Revealer tool to find it. Or, if it’s time to trade in your rewards card for a better value piece of plastic, head over to our credit card comparison table to find some of the best offers around.