Types of rewards credit cards

On the hunt for a credit card that’s going to reward you for spending? If so, you’re in the right spot! This guide will take you through all the different types of rewards credit cards you can choose from. With so many reward card options out there, find one that you will benefit from most, with perks to suit your lifestyle and needs.  

The different kinds of rewards credit cards 

Flight rewards: 

Many banks and financial institutions offer frequent flyer credit cards. These cards are directly linked to an airline's frequent flyer program such as the Qantas Frequent Flyer program or Virgin Velocity Frequent Flyer program. So each time you use your frequent flyer credit card you will accumulate Qantas or Velocity points. 


  • Best value of the rewards cards out there 
  • Receive free flights just for spending money 
  • Great for those people who love domestic or overseas travel
  • You can redeem points for travel rewards such as flight upgrades, airline lounge, hotels and car hire 


  • It may take a couple of years to earn enough points for an overseas flight 
  • With some frequent flyer programs, the points can expire

Cashback cards: 

These reward credit cards appeal to just about anyone! With cashback rewards credit cards, accumulated points are converted to cash. Some cashback cards will issue a cash voucher or credit a cash amount back to the account. For example, if you have an annual spend of $17,000 on your Westpac Altitude Rewards Card, you’ll receive $104 cashback. Compare the best cashback reward cards here! 


  • Money in your pocket each time you make a purchase using this credit card! 
  • Bonus benefits may include free travel insurance, concierge service and fraud protection. 


  • If you don’t use this card often you will not be rewarded.
  • Some cards have a cap on the value of cashback you can receive over a certain period of time.

Shopping reward cards: 

If you deem yourself a shopaholic, than a shopping rewards credit card could be best for you! With these cards you can earn points when you shop at retail stores, supermarkets and even when you purchase petrol. For example when you shop at Coles you can swipe your Flybuys credit card to earn points or when at Woolworths you can accrue points with an Everyday Rewards credit card. Points can then be redeemed for vouchers so you can enjoy discounts when you do the weekly grocery shop at Coles or Woolworths or at BP or Shell when you fill up with petrol.    


  • Be rewarded for making everyday purchases. 
  • There’s a range of rewards to choose from to suit your shopping habits. 


  • You may not receive the best value for points. 
  • These cards have a hefty annual fee and high interest rates. 

What to consider when choosing a rewards credit card 

There’s so much talk about rewards credit cards, they’re advertised on TV, appear in our junk email and are even plastered across buses. So what do you need to look for when signing up for one of these cards? Take the time to ask yourself the following questions when you do your research, this will help narrow your decision. Also, use the nifty Mozo Rewards Revealer Tool to find the card that best suits you.   

Q1. Do the points expire? Try and find a rewards credit card where the points don’t expire. It would be a waste of a money earning points only to have them washed down the drain by the time you want to redeem them. Each type of rewards credit card has different regulations around expiry of points. 

Q2. Is there a points capping? Look for a rewards credit card that doesn’t limit your annual points earning or place other restrictions on your points or rewards. If there is a limit, make sure it isn’t so low you don’t get any value from the rewards on offer. 

Q3. What are my interests? Consider a card that will reward you for things that you are interested in. There’s no point signing up for a frequent flyer rewards card if you have a fear of flying or no real interest in travel. Think about your lifestyle, hobbies and interests and that will help you in deciding a rewards credit card that you will get the most value from. 

Q4. How much is the annual fee? The annual fee for rewards credits cards is significantly higher than a credit card without any rewards attached. So make sure when you compare rewards credit cards you take into consideration the annual fee.    

Q5. How much are the points worth? Generally speaking, most reward cards have a standard equation of $1 equals 1 point. However some cards may have a higher or lower value depending on the brand. For example, $1 spent on AMEX may earn you 3 points but only one on Visa. 

Rewards credit card fees and interest 

You may be rewarded for your spending but like all credit cards, these handy pieces of plastic do come with fees, charges and a high interest rate. 

  • Interest: Banks and financial institutions do charge hefty interest rates for rewards credit cards usually between 19-22%. So make sure you pay off the full amount owing on your statement to avoid being charged interest. 
  • Annual fee: It’s hard to dodge the expensive annual fee of rewards credit cards! It’s the most of all types of credit cards and can range from $100-$450. Make sure you choose a card where the annual fee doesn’t cost you more than what you’ll receive in rewards value. 
  • Cash advance fee: Avoid using your rewards credit card to withdraw money from an ATM if not you’ll be slapped with a cash advance fee. Your provider will charge a withdrawal fee of around 3% on the amount you take out plus you will be charged interest on that money which can be as high as 20%. 
  • Currency conversion fee: When you use your credit card overseas or when you shop at an international online store your provider will charge you a currency conversion fee of around 3% of the Australian dollar amount. 
  • Reward membership fee: There may be a fee for joining or becoming a member of a reward program such as frequent flyer. However check with your provider as they may waive this membership fee. 
  • Late payment fee:  Fail to pay your credit card bill by the due date and you’ll be hit with a late payment fee of around $30. This fee can be easily avoided by setting up a direct debt or automatic transfer. For tips on avoiding credit card fees click here!

Top 10 tips for redeeming and earning reward points 

1# When possible always use your rewards credit card to make purchases. 

2# Pay for bills with your rewards credit cards. 

3# Shop with affiliated partners. 

4# Fly with the airline and the partner airlines of your frequent flyer loyalty program. 

5# When redeeming points ensure you are getting the best value for your reward. 

6# Take advantage of bonus points offer. 

7# Make sure you redeem your points before they expire. 

8# You’ll get the best value for your points by redeeming them for flights not shopping rewards. 

9# Sign up to e-newsletters so you can be alerted to special offers to earn bonus points. 

10# Don’t forget you can earn points when you wine and dine at restaurants affiliated to your rewards card. 

Who is a rewards credit card suited for? 

  • People over 18 years. 
  • You must have an impressive credit rating to be approved for a rewards credit card.
  • You need to have an annual minimum salary of around $35,000. 
  • This card is best for people who are going to pay their credit card bill in full and on time. 
  • People who are big spenders and regularly use their credit card. 
  • Check out our guide on applying for a credit card, it will help make the application process a lot smoother!