How can you make sure your rewards card is right for you?

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New research reveals that the average value of rewards cards has dropped by 63 per cent since the Reserve Bank’s interchange fee reforms.

Financial comparison site Mozo examined the value on offer from 122 rewards credit cards now versus 12 months ago and found that the average rewards card now delivers just $27 in value once the annual fee is taken into account.

Last year, the average net value from rewards credit cards delivered around $72 a year.

Many rewards credit cards are delivering a negative net return. The research found 45 cards that now charge more in annual fees than can be earned in rewards value each year, assuming an average spend of $19,000 per year.

“Our research shows that the average Australian credit card holder is now spending $19,000 a year on their card and receiving less than $30 a year back in net rewards value. That’s a return of just 0.15 per cent,” said Mozo Director Kirsty Lamont.

“Losing money on your rewards credit card is hardly an appealing offer, but many cardholders continue to lose out because their rewards card is not tailored to their spending habits,” says Ms Lamont.

The research also reveals that big spenders can still achieve high returns on rewards cards; with higher spend levels resulting in significantly higher rewards.

Cardholders who spend $30,000 annually can earn $615 in net rewards value with the highest performing rewards credit card.

“Once you have the right rewards credit card, think about how to glean most value from it, without unnecessary spending and point chasing,” Ms Lamont explained.

“Points can be maximised by using your rewards card for every day purchases, setting up direct debits for ongoing payments such as gym memberships and phone bills and researching what existing partnerships your card company has and whether it is beneficial to shop with these providers.

“For the average spender, a no or low annual fee rewards credit card is likely to be the best rewards option. Premium rewards cards with huge annual fees are generally only useful for those spending $60,000 a year or more on their card.”

Mozo found that 9 out of 10 credit cards aligned with airline point schemes yield the greatest return. Domestic rather than international travel provides the best value for point expenditure.

Tips for selecting the right rewards card

  • Don’t opt for a card that encourages you to spend more than you can. It’s better to be rewarded for your spending behaviour than chasing the rewards benefits.

  • Do your research – take note of the annual fee and the time limitation put on any vouchers/rewards you have earned.

  • Always pay your balance in full each month. Interest charges will far outweigh the benefit of any reward points you earn.

  • Boost the value of your rewards by taking advantage of bonus point offers where possible.

  • Check to see if there is a cap on the amount of points you can earn.

To find out which card reward programs deliver the most value, consumers can crunch the numbers using Mozo’s Rewards Revealer, which compares 117 rewards cards based on an individual’s spending habits and preferred rewards type.

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Written by Ben


Total Comments: 9
  1. 0

    Certainly not what they used to be.

  2. 0

    I have an AMEX card and 2 Platinum card and between them I earn over $1,000 in reward dollars plus several free return flights a year.

    • 0

      Know what you mean. Love those free flights and my bank doesn’t charge me the annual fee.

      Servos and caravan parks in Queensland are starting to charge fees for using your credit cards now too.

  3. 0

    Flybuys is good. For less well off people you can use points to get money off purchases at places like Target. Also, emovie tickets can be earned which can be used as gifts or for a day out at the movies.
    People with a lot of money will scoff but for us pensioners it helps.

  4. 0

    I have a rewards card but do not go chasing points. If in the course of my normal shopping I get points – all well and good. Eventually I have enough points to do something with them such as sailing on Sydney Harbour, meals in restaurants, purchase items I wouldn’t normally buy, or even get money off a shop.

    Much like going to the annual sales, its only a bargain if you actually need it (which means if you only buy something in the sales because it is cheap and you don’t need it, it is not a bargain at all! Its an expense you can do without.)

    • 0

      We target our spending where possible and even get a second bite at the cherry with rewards programs from Woolies and Coles. Why wouldn’t you use this system whilst it lasts? And you wonder why some people cry poor!

  5. 0

    “the average Australian credit card holder is now spending $19,000 a year on their card and receiving less than $30 a year back”.

    Huh? More research needed Ben as you are wrong!

    My ANZ Platinum Rewards Card pays $100 every time I spend $20,000. I get 2 points (now that the Amex attached card is gone) per dollar spent also have also have free Travel Insurance. The Annual Fee and Rewards Fee costs me $95 pa.

    Don’t want to do advertising for this card but as long as ANZ looks after us we will stay with them. It’s a great product and I have no idea what you are going on about mate. Do your research.

  6. 0

    Council, utlilties and lots of providers now charging CC card fee for payments

    For some of these its cheaper to pay by Debit Card or bank transfer

    Need to do your sums (only takes a few mental seconds) – dont be a wally !

  7. 0

    We save a lot of money (hundreds of dollars) by using the credit card for its free travel insurance scheme.



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