Card rewards move away from travel
Credit card issuers are moving away from expensive frequent flyer programs and diversifying their rewards for customers. The move has come as a result of the Reserve Bank's reforms and although it means much more choice for consumers this will be offset by annual fees and higher interest charges.
However, credit card holders seem to have accepted the change, with the Commonwealth Bank's latest report on customer redemption preferences showing people like “shopping” more than frequent flyer points. Other redemption options gaining in popularity are charities, entertainment and banking (ie offsetting annual fees with points).
The Australian Consumers' Association says banks are trying to steer people away from airline points as it costs the banks less to offer other rewards. The ACA warns consumers not to think they're getting something for nothing, as they're paying for their rewards through higher interest rates and increased annual card fees.