How to get value out of a rewards credit card

Do you want a credit card that gives you points for free airline flights, other rewards and even cash back? Sounds great right? 

Yes, well to make a rewards credit card deliver real rewards to you, for free or for very little actual expense, means:

You have to choose a good rewards credit card that suits your pattern of spending

You need to pay off your spending within the interest free days and not accumulate an expensive interest bearing debt.

How to choose a rewards credit card

Everyone hopes to earn free airline tickets or a free overseas holiday by doing their ordinary spending on their credit card. But do you know how much money you need to spend on your credit card to get those rewards? Do you know the full cost of the card? There are three big factors to consider when choosing a rewards credit card:

The spend required to earn points 

Interest rate and annual fee

How many interest free days are offered

You can search and compare credit cards using all of these criteria on InfoChoice. Some credit cards promise great rewards and plenty of frequent flyer points but the fine print reveals an astronomical level of spending is required to earn those points. Other credit cards are much more generous but may have a high interest rate or annual fee. InfoChoice lists 68 rewards credit cards now on the market in Australia.

How much do I need to spend to earn a free flight?

InfoChoice tells you how much spending you need to put on your credit card to earn free return flight between Melbourne and Sydney.  Just click on the column heading “Spend read for SYD-MEL ret flight” for the answer. Right now the David Jones American Express Platinum Card requires a spend of $1,500 for a SYD-MEL return flight. There are conditions and you can read more here. Many credit cards are offering free SYD-MEL flights with a spend in the range of $5,000 to $10,000. These cards are all more generous than the credit cards now requiring a spend of over $40,000 to earn a free flight.

Interest rates and fees on rewards credit cards

Most rewards credit cards charge an annual fee of around $100 or more. There are three credit cards offering rewards with no annual fee. The most expensive annual fees in the rewards credit card market is $700.

Purchase interest rates on rewards credit cards range from 16.8 per cent to 23.49 per cent. Most rewards credit card charge around the 18 to 20 per cent range on purchases.

Interest free days on rewards credit cards

Paying interest on your purchases eats away at the value of the points you are earning by spending on your credit card. Most rewards credit cards offer 44 or 55 days interest free on purchases. There are currently two credit cards offering up to 62 days interest free.

Check out the full range of rewards credit cards in the market now at InfoChoice.


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