Review Your Credit Card Rewards – Is Your Annual Fee Costing You More Than The Rewards You Receive?

Have you ever asked if your annual fee is costing more than your credit card rewards? If you are like most people the answer is probably no.

We tend to assume that just because we are earning points and then using those points for Frequent Flyer miles or shopping or whatever the card issuer offers that we are getting a good deal. Unfortunately, that is not always the case. Many times the annual fee for rewards cards is quite high making the cost of owning that card more then the value of your rewards.

You have to break it all down to see if the annual fee costing more than your credit card rewards. For example, a typical rewards credit card carries an annual fee between $40 and $75. If you own a gold or platinum credit card that rate jumps up significantly, some to more then $200 annually. With a standard card you will usually earn one point for each dollar you spend, with higher end cards you can earn more, sometimes two or three, points per dollar. Many credit card analysts note that if your annual fee is just $50 you have to spend $10,000 per annum just to earn it back in points. That is a hefty amount of credit card charges for the average user it averages out to at least $1,000 in expenditures each month on your card to counteract the money you spend on rewards scheme fees.

How to know if your annual fee is costing more then your credit card rewards

• Choose your credit cards wisely. Look for a card that has a low annual fee and offers rewards on all of your transactions.
• Pay off your bill every month. If you carry a balance from month to month it is unlikely that your rewards will outweigh the cost of interest. Instead of a rewards card you might choose a low interest card that has no rewards program.
• See if you can use points to pay your annual fee. This is one way to make sure you are not one whose annual fee is costing more than your credit card rewards. if you still have points left over, after you have used some to pay your annual fee then you are clearly coming out ahead of the game.
• Evaluate your spending. If you do not think your will spend at least $1,000 each month on your credit card you will most likely be better off with a different type of card.

Evaluate each card you have or are considering to avoid your annual fee is costing more then your credit card rewards. Rewards programs are good, but only when they are also the best option for your bank account. Keeping a tight rein on your cash is the best reward you can give yourself.

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Popular Credit Card Offers

			Interest Rate (p.a.)	Balance Transfer Rate (p.a.)	Annual fee	Cash Advance Rate (p.a.)
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	ANZ Platinum Credit Card	An introductory interest rate offer on balance transfers and purchases, plus a $0 first year annual fee.	0% for 6 months (reverts to 19.24% )	0% for 6 months	$0 annual fee for the first year( $87 thereafter)	20.99%