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

Aussies love our rewards points, but recent Mozo research has revealed that they may not love us back, as the value of a rewards credit card is now lower than ever, ringing in at a net gain of just $27 each year.

Mozo’s Annual Rewards Card Survey analysed 122 rewards credit cards and found that net value had dropped by a staggering 63% since last year’s survey. The average piece of rewards plastic is worth just $27 in 2017, down from $72 in 2016.

“The decline in value of rewards cards is actually accelerating. Between 2015 and 2016, net value dropped by $16. This year, it’s fallen by $45 - nearly three times as much,” said Mozo Director, Kirsty Lamont.

“What these results show is that spenders need to be more aware than ever of what kind of value they’re getting from their rewards card and be willing to drop cards that aren’t pulling their weight.”

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Mozo determined net value by weighing up the dollar value of rewards on offer against the cost of the annual fee.

The average rewards card annual fee is now $177 - which is four times as high as a typical non-rewards card, which prices in at a more reasonable $45 a year. The highest annual fee around is still a whopping $749.

These notoriously high annual fees can prevent rewards cardholders from seeing real value from their spend.

For example, the American Express Qantas Discovery Card was identified as the piece of plastic delivering the best bang for Aussies rewards card buck, with a net return of $390. One of the major reasons it came out on top, according to Lamont, is that it has no annual fee.

“That means any value from points goes straight in your pocket, instead of being cancelled out by fees,” she said.

While the news is not great for rewards lovers, Mozo’s survey did turn up a number of pieces of plastic still offering a decent rewards return. Plus, there are other bonuses on offer with rewards cards, which the net value doesn’t account for, added Lamont.

“Things like complimentary travel insurance, a concierge service or even free flights add value for spenders who will actually use them so you should also factor those in when you’re deciding on a rewards card,” she said.

“It’s not all doom and gloom, and there’s no need to swear off rewards forever, but it is vital for shoppers to take the time to search out the best value offer possible.”

Top rewards cards by net value

CardNet rewards valueAnnual fee
American Express Qantas Discovery Card$390$0
HSBC Premier World MasterCard (Qantas Frequent Flyer)$291$99
American Express Velocity Escape Card$261$0
Westpac Altitude Platinum (Qantas)$240$150

Check out our Rewards Revealer tool to find your perfect rewards credit card match.

Net rewards values mentioned in this article are based on an annual spend of $19,000