Is your rewards credit card losing you money?

The whole point of having a rewards credit card may be to rack up extra value through points, bonuses and freebies, but if you’ve chosen your plastic unwisely, it may just be costing you more than it's worth.

Mozo’s recent 2017 Rewards Card Survey, which showed that average rewards value has slipped by a massive 67% this year, also revealed that the number of cards actually sending Aussie spenders backward has jumped by half.

Last year, 30 of the rewards cards analysed by Mozo delivered a negative ‘net’ return - that is, they came with an annual fee higher than the value they delivered in rewards. This year, that number had risen to 45.

“According to our research, the average rewards cardholder is now earning just $27 of added value on a $19,000 spend - that’s not much, but it’s far better than losing money, which is what Aussies with these particular cards are doing,” said Mozo Director Kirsty Lamont.

“Cardholders need to be thinking carefully about the real value they’re getting out of their plastic. If you’re losing money chasing points, you’re probably better off opting for a low rate credit card instead.”

RELATED: Rewards card value plummets to just $27 a year: still worth it?

On 12 different rewards cards, spenders would be more than $100 worse off, thanks to the points earn not measuring up to high annual fees. On the other end of the scale, 32 cards delivered $100 or more in value, down from 47 last year.

“Sometimes the annual fee is justified by the rewards on offer, but sometimes, this cost completely cancel out any benefits the rewards program might promise,” said Lamont.

Though the annual fee is a major hurdle, declining redemption value is also a problem for Aussie points lovers. This year, the maximum number of points a cardholder might need to redeem for $100 cashback jumped to 87,400, up from 64,000 in 2016.

As a redemption option, cashing in points for a $100 gift card generally delivered negative value, while domestic flights got Aussies the most bang for their buck.

RELATED: Top Frequent Flyer Rewards Cards – August 2017

But it’s not all bad news. The top ten cards Mozo analysed all delivered more than $200 in net rewards value, and there are other extras to take into account on some cards, like complimentary travel insurance, free flights and 24/7 concierge service.

According to Lamont, the trick is finding a piece of plastic that not only bags you the type of rewards you’ll really use, but also fits in with your budget. To do that, take our Rewards Revealer tool for a whirl. It compares 122 rewards credit cards in order to find your match.