Mozo guides

What fees come with a rewards card?

A credit card is a super convenient way to spend - and opt for a rewards credit card and you’ll also get the opportunity to earn freebies and perks while you shop. But all that doesn’t come without a price tag attached.

Below, we’ve broken down some of the main fees you can expect to pay while carrying a rewards credit card in your pocket.

Want some of the best rewards credit card deals available? Compare below. - last updated 19 March 2024

Search promoted rewards credit cards below or do a full Mozo database search. Advertiser disclosure
  • Apply By 2 Apr 2024
    American Express Qantas Ultimate Card

    Qantas Frequent Flyer

    $450

    100,000

    1.25 points up to 100,000 points/year, then
    1 point uncapped

    Receive 100,000 bonus Qantas Points when you apply online by 2 April 2024 , are approved, and spend $3,000 on eligible purchases on your new Qantas American Express Ultimate Card within the first 3 months. T&Cs apply. Available to new American Express Card Members only.

    Compare
    Details
  • NAB Qantas Rewards Premium Card

    Qantas Frequent Flyer

    $250 $150 in the first year

    70,000

    0.66 points up to $3,000/month, then
    0.33 points up to $6,000/month

    70,000 Bonus Qantas Points. Offer applies to a new NAB Qantas Rewards Premium Card when you spend $2,000 on everyday purchases within 60 days.

    Compare
    Details
  • American Express Qantas Premium Card

    Qantas Frequent Flyer

    $249

    20,000

    1 point uncapped

    Receive 20,000 bonus Qantas Points when you apply, are approved, and spend $3,000 on eligible purchases on your new Qantas American Express Premium Card within 3 months of Card Membership. T&C’s apply. Available to new American Express Card Members only.

    Compare
    Details
  • NAB Rewards Signature Card

    NAB Rewards

    $295 $145 in the first year

    160,000

    1.25 points uncapped

    Earn 100,000 bonus points when you spend $3,000 on everyday purchases within the first 60 days of account opening and 40,000 bonus points when you keep your card for over 12 months (T&Cs apply). Enjoy a reduced annual card fee (from $295 to $195) for the first year. Up to 44 Interest free days on purchases (T&Cs apply). $15,000 minimum credit limit. 0% p.a. on standard balance transfer (BT) rate for 12 months (3% BT fee applies).

    Compare
    Details

Fees when you use your card

There are some fees you might pay just for having your card, or because you use your card in a certain way. These include:

Annual fee

The annual fee is one of the main fees you’ll have to budget for when you pick up a rewards credit card. Rewards cards usually come with a steeper fee than regular credit cards, often ranging between $100 and $450. On the other hand, you can find options with no annual fee at all - but there aren’t many.

Cash advance fee

If you hit up the ATM with credit card in hand, be prepared to pay for the privilege. The cash advance fee can come in the form of a set dollar amount, or as a percentage of the amount of cash you withdraw. Plus, it’s not just the fee you have to worry about - when withdrawing cash using your credit card, you’ll pay the cash advance interest rate as well, which is often much higher than regular interest, and is applied straight away, with no interest free period.

International transaction fee

Travel often? Or maybe you have a weakness for online shopping at international stores? Either way, if you’re using your card to make payments in foreign currency, keep in mind that the international transaction fee will apply. Like the cash advance fee, this might come in the form of a dollar value, but is more often charged as a percentage of your purchase amount.

Rewards program fee

Depending what program you choose, any fees associated with your rewards program may be covered by the annual fee or they may be an extra cost you have to foot the bill for. Airline rewards programs especially may have extra members fees you should look out for.

Additional cardholder fee

Want a strategy to earn a stack of rewards points fast? Get a supplementary credit card and give it to your spouse, brother, mother or adult child to put all their spending on. Just remember to check if this additional card will come with a fee - and weigh that extra cost up against the value of those extra points.

Penalty fees

There are also some fees you might incur if you don’t manage your credit card use responsibly. These include:

Late fee

If you fudged your budgeting a bit this month then you’ll likely be hit by the dreaded late fee. This is often around $15, and if you form a habit of missing payments, that can add up quite quickly. The good news is all you have to do to avoid this fee is pay the minimum required amount each month. It’s a good idea to think about setting up automatic payments to cover this amount (if not more) to keep yourself out of trouble.

Overdraft fee

Go over your credit limit while you’re spending up a storm and you might be faced with an overdraft fee. Overdraft, or overlimit, fees often carry a price tag of about $35 - so they’re going to bang your budget around even worse than a late fee!

Replacement card fee

This one’s pretty self explanatory - lose your card and you may be up for a fee to replace it.

Other costs to watch out for

Fees are not the only cost you need to be aware of when using your rewards credit card. You can be stung in other ways if you’re not careful, so keep an eye on:

Your interest rate

Generally speaking, rewards cards will come with a steeper interest rate attached than your average credit card. That means, if you forget to pay off your balance in full each month, it’s easy to wind up with a credit card bill as long as your arm.
The good news is, you can avoid paying interest at all by taking advantage of your interest free days, and always paying your bill. You might even want to set up automatic payments, just to be sure.

Credit card surcharges

When you hit the shops or log in to your favourite online store, look out for retailers applying surcharges for credit card use. While there are now regulations around businesses surcharging excessively, you might still be charged between 1% and 3% to use your plastic.

If one of your regular shopping destinations surcharges for credit card use, it might be a good idea to have a debit card or cash in your pocket as a backup.

Make your annual fee worth it

While the steep annual fee of a rewards credit card may just seem like a pain in the neck, remember that you’re paying it so you can cash in on all the freebies and rewards on offer. So one of the tricks to choosing a good rewards credit card is weighing up the value of your rewards program against the cost of your annual fee.

If you’re someone who travels frequently, shops up a storm, uses complimentary insurance and likes to take the concierge service for a whirl, then a $450 annual fee might pay for itself in rewards value.

On the other hand, if you’re not interested in extra insurances or special VIP offers and instead just want to cash in on a free flight or a toaster now and then, it will be easier to justify a smaller $100 annual fee.

In order to make paying your annual fee worth it, you should also look at factors like:

  • Points earning value - as a rule of thumb, aim to earn at least 1 point for every $1 you spend.
  • Points redemption value - you might be earning heaps of points, but make sure the value you’re getting for them at the redemption end of things doesn’t cancel out all your hard work.
  • Points caps - some rewards card providers cap your points either monthly or annually. Make sure you know what caps apply, to make the most of your spending.
  • Points expiry dates - don’t let those hard earned points go to waste! Some cards come with points expiry dates (often around 36 months) so make sure you redeem them before they expire.

Want to know more? Check out our guide on how to calculate rewards points.

Compare rewards credit cards

Think a rewards credit card is for you now that you’ve got a handle on the fees it involves? Find and compare rewards cards offers in our comparison table, to make sure you’re getting the best deal for you.

Mozo Editorial
Mozo Editorial

Mozo’s team of experienced journalists and money experts provide news, insights, practical guides and expert analysis to help you master your personal finances. We follow editorial guidelines that focus on accuracy, reliability and timeliness; helping you make informed financial decisions with confidence and the most of your hard-earned money.

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

Mozo provides general product information. We don't consider your personal objectives, financial situation or needs and we aren't recommending any specific product to you. You should make your own decision after reading the PDS or offer documentation, or seeking independent advice.

While we pride ourselves on covering a wide range of products, we don't cover every product in the market. If you decide to apply for a product through our website, you will be dealing directly with the provider of that product and not with Mozo.