Rising card fees highlight cost of reward programs
Rising annual fees on credit cards with loyalty programs attached highlight the cost for consumers of participating in such schemes – they can outweigh the benefits received by way of rewards.
As reported in the Australian Financial Review (p28, 12/4/01) the annual fees for loyalty credit cards are set for substantial increases as banks and loyalty programs operators try to maintain profitability on loyalty card schemes.
The operators of the most popular loyalty card, the ANZ Qantas Telstra Visa card have already bumped up the annual fee on the basic card to $60, and on the gold card to $100.
Westpac's cards, which ties in with Ansett's Global Rewards program, is expected to rise but remains at this stage at $49 and $90.
BankChoice warns that consumers should weigh up the cost of credit (fees and interest charges) with the value of rewards received to determine whether they really are benefitting from reward programs.
The $15-dollar rise on the basic ANZ card means consumers will have to spend a much greater amount on their card each year to recoup that amount in reward value.