Rewards credit cards: Millennials shop around for a better program

By Polly Fleeting ·

It’s out with the old and in with the new for Aussie Millennial rewards credit card customers. 

This is according to a recent study by data analytics and consumer intelligence company, J.D. Power. 

In a new report, they found that 9% of Millennials have switched credit cards over the past year while 22% intend to ditch their current plastic for something fresher in the next 12 months. This is more than double that of older credit card customers (4% and 11%, respectively). 

But why are Millennials looking for something new? 

It’s all in the rewards.

Since the COVID-19 pandemic began, J.D. Power found that 48% of Millennials have been spending less on their credit card. While 18% claim the overall value of their card has decreased. In fact, recent Mozo data shows that not only Millennials but 66% of all Aussies say rewards cards are no longer worth it

However, Millennials haven’t given up hope. 29% of young Aussies are on the hunt for a better rewards program and a further 29% are looking for more benefits. 

“Millennials are savvy and are shopping around for a card that offers a better rewards program that suits their changed spending habits,” said Bronwyn Gill, head of banking and payments intelligence at J.D. Power Australia.

“Card issuers must offer reward programs that are relevant to Millennials, or risk losing longer-term relationships with this important age group.” 

What type of rewards do millennials like? 

According to the recent J.D. Power stats, the main reason Millennials opt for credit cards is out of convenience (56%). However, the second most common reason is to earn rewards (42%) and there are a few specific things that young customers are looking for. 

Millennials value cashback, gift cards and vouchers, airline miles, airline tickets and fuel rebates the most when choosing a rewards credit card. 

Millennials' fave type of rewards from credit cards

“Rewards programs are key for Millennials,” said Gill. 

“After convenience, earning rewards is the second most important reason as to why Millennials use their credit card, however new spending habits are directly influencing the ability to accumulate and redeem rewards.”

Things to consider when switching credit cards 

The truth is, changing credit cards isn’t as simple as finding a rewards program you like and then jumping ship. There are a few important things you need to consider. 

  • Fees: Compare the fees between your current card and the new card. This includes the annual fee, cash advance fee, late payment fee and foreign exchange charge. While a rewards program may seem great, if the fees outweigh what’s on offer you could end up in a worse position than you are in now.  

  • Interest rates: According to the Mozo database, credit card interest rates can range anywhere from a low 7.49% all the way up to 24.99%. And the reality is that a lot of rewards credit cards come with higher interest rates. So, if you are sacrificing a low interest rate for a better rewards program you must ensure you pay down your balance in full month to month (to avoid hefty interest repayments). However, if you tend to only pay the minimum repayment amount each month, opting for a rewards credit card with a high interest rate may end up costing you more over time. 

  • Rewards and bonus points offers: It’s crucial to get all the information you need about a particular rewards program before signing up. Consider things like points earnings (how many points you receive for every dollar you spend), rewards program type, what you can spend your points on, extra perks etc. Also remember to check out what bonus points offers are around, as they can be a good way to rack up points early on. Just bear in mind, these offers generally come with spending requirements so only sign up if you intend or regularly spend the amount required (don’t force yourself to spend more just to gain bonus points). 

Compare Rewards Credit Cards 2020 - page last updated October 24, 2020

Search promoted rewards credit cards below or do a full Mozo database search. Advertiser disclosure.

  • Thumbnail icon for American Express
    American Express Qantas Discovery Card

    Qantas Frequent Flyer


    No current offer

    0.75 points uncapped

  • Thumbnail icon for Westpac
    Westpac Altitude Platinum

    Qantas Frequent Flyer

    $200 $99 in the first year


    0.5 points uncapped

  • Thumbnail icon for Qantas Money
    Qantas Money Qantas Premier Platinum

    Qantas Frequent Flyer

    $299 $199 in the first year


    1 point up to $10,000/month, then
    0.5 points uncapped

  • Thumbnail icon for Bankwest
    Bankwest Qantas Platinum Mastercard

    Qantas Frequent Flyer



    0.75 points up to $2,500/month, then
    0.3 points uncapped

  • Thumbnail icon for St.George
    St.George Amplify Platinum

    Qantas Frequent Flyer



    0.5 points uncapped

  • Thumbnail icon for Suncorp
    Suncorp Clear Options Platinum

    Suncorp Rewards



    1.25 points uncapped


NOTE: It’s also important to keep in mind that when switching to a new credit card you are likely to face some new conditions, such as income requirements or credit history checks. This may affect your ability to apply for a particular rewards credit card or determine the credit limit you are able to have.  

RELATED ARTICLE: Afterpay: Millennials tried credit cards, but Gen Z aren't even signing up

Want to start your search for your new rewards card? Take a look at the killer options below or jump over to our rewards credit cards comparison table.

^See information about the Mozo Experts Choice Rewards Credit Cards Awards

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Polly Fleeting
Polly Fleeting
Money writer

Polly Fleeting is a personal finance writer here at Mozo, specialising in loans and credit cards. Her work is aimed at helping people find ways to make smart product choices, reduce debt and get more for their hard-earned dollars. Polly has a degree in Journalism from the University of Technology, Sydney.