Which credit card has the best airline points deal
Plenty of credit cards promote their Qantas Frequent Flyer, Velocity or other points-based rewards schemes. However, credit card rewards schemes have changed significantly over the last few years, with some banks improving their offers while other issuers rein in costs by limiting the number of points that can be earned, or raising the number of points required for a reward.
What is a rewards credit card?
A rewards credit card gives you points based on how much you spend. One point per dollar is common, but the value of the points vary from card to card. The number of points earned per dollar may also be different depending on the retailer where the credit card is used.
The credit card may be linked to an airline rewards scheme like Qantas Frequent Flyer or Virgin Velocity and the points earned are transferred to that scheme. Or the credit card issuer may have their own rewards scheme with a catalogue of items that can be purchased using your accumulated credit card points. Some credit cards simply offer cash back as a reward for accumulated points.
Rewards credit cards: What you need to know
Currently there are 71 credit cards on offer in Australia that offer rewards like free flights. Credit cards that offer rewards, cash-back and ‘free’ flights often feature higher annual fees and higher interest rates than other cards.
To get good value for money out of a rewards credit card, you need to be spending a lot of money on your card and paying it off completely every month.
People who carry a debt on their credit card will find that interest costs (plus fees) usually outweigh the value of any rewards they earn.
To help cover the costs of the rewards, rewards credit cards often feature larger annual fees. When comparing rewards credit cards, you need to factor in the cost of the annual fee. However, not all rewards credit cards charge annual fees. There are four credit cards now on offer in Australia with no annual fee and there are 30 credit cards with annual fees of $100 or less.
The highest annual fee on a rewards credit card in Australia is $700 from the Citi Prestige Visa credit card. The Citi Prestige Visa card offers 70,000 bonus points to new customers, one free night at a premium hotel per year, green fees at selected premium golf courses and Airline lounge passes.
How to compare rewards credit cards
Credit card rewards points are not all worth the same amount. And different credit cards offer different earn rates for their points. So InfoChoice has simplified the complex job of trying to compare credit card rewards for you.
Our rewards credit card comparison table features two columns that tell you how much you need to spend to earn a $100 reward and how much you need to spend to earn a free return flight between Sydney and Melbourne. For rewards programs that don’t have a set number of points to redeem flights, the approximate spend is based on a $300 travel voucher. Any bonus point offers and point capping are not included in the calculation. You can sort these columns by clicking on the table’s column headers.
So, which credit card has the best QFF, Velocity or other points deal?
Finding the best card for you means tailoring the card features to your spending patterns and the retailers you visit regularly. Right now, there are five credit cards that will give you a $100 reward when you spend $4,500.
These are all American Express cards. For example, the David Jones American Express Card has a low annual fee of $99, a purchase interest rate of 20.74 per cent and up to 44 days interest free.
To earn a free return flight between Sydney and Melbourne, the David Jones American Express Platinum card requires a spend of $1500. This card has an annual fee of $295, a purchase interest rate of 20.74 per cent and up to 44 days interest free.
Other interesting offers in the rewards credit card market at the moment include:
The NAB Velocity Rewards Premium Card which comes with 25,000 bonus Velocity points, an annual fee of $150, a purchase interest rate of 19.99 per cent and a 15 month zero interest balance transfer deal.
The ANZ Rewards Black credit card offers 75,000 bonus points, a purchase rate of 18.79 per cent, annual fee of $375 and up to 55 days interest free.
The American Express Velocity Escape Card has no annual fee, a purchase interest rate of 20.74 per cent and 7,500 bonus Velocity points.
Research and compare rewards credit cards with InfoChoice today.