Rewards credit cards: Millennials shop around for a better program

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 - last updated February 27, 2021

Search promoted rewards credit cards below or do a full Mozo database search. Advertiser disclosure.
  • St.George Amplify Signature

    Earn up to 200,000 Bonus Amplify Rewards Points over 2 years (130k yr 1, 70k yr 2) when you spend $12k on eligible purchases each year. $139 reduced first year annual card fee (normally $279). New cards only, Eligibility criteria and T&Cs apply. Offer ends March 2nd 2021.

    Rewards program
    Annual fee
    Bonus points
    Earn rate per $1
    Amplify Rewards
    $279 $139 in the first year
    200,000
    1.5 points uncapped
    Compare
    Details
  • Mozo Experts Choice 2020
    American Express Qantas Ultimate Card

    Receive 100,000 bonus Qantas Points when you apply online by 5 April 2021, are approved and spend $3,000 on your new Card within the first 3 months. T&Cs apply. New Card Members only. Mozo Experts Choice Qantas Frequent Flyer Premium Credit Card Winner 2020^. T&C’s apply

    Rewards program
    Annual fee
    Bonus points
    Earn rate per $1
    Qantas Frequent Flyer
    $450
    100,000
    1.25 points uncapped
    Compare
    Details
  • NAB Qantas Rewards Signature Card

    NABs fastest way to earn Qantas Points. 130,000 bonus Qantas Points when you spend $3,000 on everyday purchases within 60 days of account opening and keep the card open for 12 months. 7 complimentary insurances when you meet eligibility criteria including Overseas Travel Insurance.

    Rewards program
    Annual fee
    Bonus points
    Earn rate per $1
    Qantas Frequent Flyer
    $395 $295 in the first year
    130,000
    1 point up to $5,000/month, then
    0.5 points up to $20,000/month
    Compare
    Details
  • BankSA Amplify Signature

    Earn up to 200,000 Bonus Amplify Rewards Points over 2 years (130k yr 1, 70k yr 2) when you spend $12k on eligible purchases each year. $139 reduced first year annual card fee (normally $279). New cards only, Eligibility criteria and T&Cs apply. Offer ends 2nd March 2021.

    Rewards program
    Annual fee
    Bonus points
    Earn rate per $1
    Amplify Rewards
    $279 $139 in the first year
    200,000
    1.5 points uncapped
    Compare
    Details
  • Mozo Experts Choice 2020
    American Express Qantas Discovery Card

    Receive up to 1.75 Qantas Points for every $1 spent on Card purchases (T&Cs apply). No annual fee for the life of the card. T&C’s apply. Mozo Experts Choice Qantas Frequent Flyer Credit Card Winner 2020^.

    Rewards program
    Annual fee
    Bonus points
    Earn rate per $1
    Qantas Frequent Flyer
    $0
    No current offer
    0.75 points uncapped
    Compare
    Details
  • NAB Qantas Rewards Premium Card

    30,000 bonus Qantas Points when you spend $2,500 within 60 days (T&Cs apply).

    Rewards program
    Annual fee
    Bonus points
    Earn rate per $1
    Qantas Frequent Flyer
    $250
    30,000
    0.66 points up to $3,000/month, then
    0.33 points up to $6,000/month
    Compare
    Details

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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