Expert: Don't spend on credit cards just to earn points

Consumers should avoid using their credit cards simply to build up reward points, an expert has warned.

Speaking to the Sydney Morning Herald, Canstar Cannex financial analyst Peter Arnold noted that people who spend on their cards merely to gain points will often see such rewards eroded by credit card surcharges.

He was commenting after research by Citibank found that one in five people neglect to redeem their points.

Among the survey's other findings it was revealed that many people are unaware of the offers and discounts that come as standard with credit cards without additional spending such as extended warranties or free travel insurance.

''I'm sure a lot of these things aren't being accessed by the majority of people,'' commented Mr Arnold. ''That comes down to knowing what's available, by reading through the PDS [product disclosure statement].''

Consumers aiming to boost their spending power could also choose to compare credit cards in search of the better options. Earlier this week, Investopedia suggested that a consumer's credit card activity can be a key indicator of whether or not they can afford their mortgage.

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