Rewards credit cards earn you points for flights, travel upgrades, gift cards, cashback and more. Find out how these programs work and compare rewards credit cards to take your benefits to the next level.
Rewards credit cards have the potential to add a huge amount of value to your account, but you’ll need to compare your options to make sure the perks outweigh the costs. Here, you’ll find everything you need to know about rewards credit cards, including how they work, the different programs available and how to compare them.
Rewards Credit Card Offer
The ANZ Rewards Black credit card offers up to 3 Reward Points for every $1 of eligible purchases with uncapped number of points earned.
- Receive 75,000 Reward Points when you spend $2,500 on eligible purchases within the first three months of card approval and enjoy no annual fee for the first year
- Earn up to 3 Reward Points for every $1 spent on eligible purchases using the ANZ Rewards Black American Express card® (uncapped) and 1.25 Reward Points per $1 spent on eligible purchases using the ANZ Rewards Black Visa card (uncapped)
- Offer available to new and approved applicants
Compare types of Rewards Credit Cards
How do credit card rewards programs work?
Rewards credit cards give you benefits for using the account, usually in the form of points per $1 spent. These points can then be redeemed for specific rewards offered through the program.
Credit card brands consider reward programs as an added benefit for customers and invest a lot of money in them, which is why some reward credit cards have higher annual fees and interest rates than other options. You can make sure the benefits of a reward credit card are worth more than what you pay for them but checking the costs associated with a reward credit card and compare them against the potential value of the program.
Redeeming credit card rewards
The rewards you can look forward to depend on the card, but some of the more popular redemption categories include:
- Flight upgrades
- Gift cards
- Fuel vouchers
- Instant shopping discounts
- Fashion items
- Tickets to concerts and other events
Each reward option within these categories has a point value (e.g. 10,000 points for a $20 gift card) and some programs, such as CommBank Awards, include points-plus-pay options. This means you can use a mixture of points and cash to redeem the reward.Back to top
Types of credit card reward programs in Australia
Compare the specific credit card reward programs available and discover which one offers you the most value:
Frequent flyer programs
There are two main ways you can earn frequent flyer points with a rewards credit card in Australia:
|Types of frequent flyer reward cards||Description||Examples|
|Direct earn frequent flyer reward cards||These cards are linked with a specific frequent flyer program and rewards are added directly to your airline loyalty account.||American Express Qantas Discovery card, earns 1 Qantas point per $1 spent, and the Virgin Australia Velocity Rewards card earns 1 Velocity point per $1.|
As well as credit cards that directly earn Qantas or Virgin Australia Velocity frequent flyer points, there are several cards that directly earn points for other airline loyalty programs, including the Emirates World Citi credit card and Jetstar’s Classic and Platinum MasterCards.
|Indirectly earn frequent flyer points||Other credit card reward programs also let you transfer the points you earn to many different frequent flyer programs from all around the world.|
Credit cards that indirectly earn frequent flyer points in this way give you a lot more flexibility to switch between airline loyalty programs if you often fly with different companies.
|If you get a card that earns American Express Membership Rewards, for example, you have the option of transferring points to 10 different airline reward programs, including Qantas, Velocity, Air New Zealand’s Airpoints program and Singapore Airlines KrisFlyer program.|
Credit card brand rewards programs
Credit card brands also have their own reward programs that are linked to a range of cards, including:
- American Express
- ANZ Rewards
- Citi Rewards
- CommBank Awards
- Westpac Altitude Rewards
Supermarket and retail reward programs
A few reward credit cards are also linked to supermarket or retail reward programs, such as the Coles Rewards MasterCard, the Woolworths Everyday Money credit card and the David Jones American Express. This means that you can earn rewards points on your weekly grocery shop.
Cashback credit cards
These types of rewards give you a percentage of your total spend as cash back or provide a one off cashback sum when you apply for the credit card.Back to top
How to compare reward credit cards in Australia
Comparing credit cards helps you find the features that suit your lifestyle while also keeping costs affordable. Below, you’ll find a checklist of things to consider when you are comparing reward credit cards.
- Points per dollar
The more points you earn per dollar spent, the greater the potential value. A good rule of thumb is to look for a card that offers at least 1 point per $1 for most transactions, although it does depend on the reward program.
- Point expiry and caps
Some credit card reward points expire after a certain amount of time, and some accounts have a limit on how many points you can earn in a month or year. Both of these features can limit the potential value, so it’s important to take them into account before you choose a card.
- Bonus point offers
Reward credit cards often have signup deals that give you hundreds or thousands of bonus points. Check out these offers and what you need to do to earn the additional points so that you can make the most of the reward card you choose.
- Reward values
- Points value
To work out the value of your rewards, consider how many points it would take to make redemptions. For example, it might cost 8,000 points to get a $50 gift card in one reward program, and 12,000 in another. So if your program has an earn rate of 1 point per $1 spent, you would’ve need to have spent $8,000 to redeem a $50 gift card. Breaking down the rewards like this can help you determine whether it’s worth your time and money.
- Points value
- Rewards partners
Different banks have varying ranges of rewards partners, providing various options for stores and services to redeem from. Choose a credit card rewards program who has partnerships with your favourite brands and products.
- Redemption limitations.
Some reward programs have blackout periods when you may not be able to make redemptions. Check the fine print for this information and consider the impact it could have on you.
Rates & Fees
- Annual fees
Ideally, the value of the rewards you earn should be equal to or more than the annual fee of a credit card. For instance, if you hardly ever use a credit card and pay a $300 annual fee, you’ll end up losing more money than you gain. On the other hand, a premium reward option with a high annual fee could be worth it if you use your credit card for most purchases you make.
- Interest rates
Rewards points can be a great way to get something back for your purchases, but remember that you have to repay everything (plus interest). Consider how much interest your purchases will accrue to ensure whether the rewards you’ll receive outweigh the costs you’ll be forking out to repay your balance. You should also consider other costs on the card including cash advance rates and balance transfer rates.
- What other complimentary extras come with the card? Look for things like travel insurance, purchase protection and airport lounge access to get even more value out of the reward credit card you choose.
Will a rewards credit card work for you?
The value of a rewards credit card depends as much on the cardholder as the actual card you choose. So rather than making a definitive statement about whether or not reward credit cards are valuable or expensive, let’s take a look at what types of people they are likely and unlikely to work for.
A reward credit card could be ideal if you:
- Pay off your credit card balance in full every month
- Currently use a credit card on a regular basis
- Have a clear idea of the type of points you want to earn
- Are part of an existing reward program that could be complemented by a credit card (i.e. a frequent flyer program or shopping reward program)
- Earn enough to pay a high annual fee
- Can regularly make use of the rewards or complimentary extras on the card, such as insurance.
A reward credit card might not be right if you:
- Have a lot of credit card debt
- Often carry a balance on your credit card
- Rarely use a credit card
- Won’t be able to regularly use complimentary extras on the card
- Can’t afford a higher annual fee.
It’s worth noting that there are exceptions in both of these cases. If you can’t afford a high annual fee, for example, you might still get a lot of value out of a reward credit card with no annual fee. On the other hand, if you regularly use a credit card but also have a lot of debt, it might be better to switch to a balance transfer or low interest rate credit card so that you get value out of paying less interest.
The most effective way to tell if a reward credit card is worth it is to compare different options and consider your personal circumstances, so that you can choose a card that will work for you.Back to top
Frequently Asked Questions
How can I view and manage my points?
Most rewards programs allow cardholders or members to view their points through an online account centre. Usually you’ll need a membership number or username and password to log in. Once you’ve logged in, you should be able to view your points and redeem them for the desired rewards.
Can I convert my points to points with another airline or issuer?
Most rewards programs don’t allow members to directly convert their points for points with another system. However, some options, such as Qantas Frequently Flyer or Virgin Velocity, allow cardholders to earn and redeem points with partnered airlines and organisations. Read the terms and conditions or contact your rewards program directly to confirm where else you can earn and use your points.
How many points will I need for a particular item or flight?
The amount of points you’ll need will depend on your credit card, the product and the details of the flight. In terms of flights, most frequent flyer programs have a points calculator available on their website. If you enter your preferred route and ticket status, the calculator can determine how many points you’ll need to cover the flight.
In regards to other types of rewards, most programs have an online catalogue that’ll allow you to browse the rewards on offer and how many points you’ll need to redeem a certain product or service
I've redeemed a reward with my points, but now I've changed my mind. Can I refund my points?
Again, this will depend on the credit card, but generally you can’t refund rewards or points once the transaction has been made.
How do I know which rewards program or rewards credit card is for me?
As a financial comparison service, we can’t recommend any specific product to our users. Instead, we provide them with the information they need to make an informed comparison and decision. When comparing rewards credit cards, consider your spending habits to determine whether the rewards you’ll receive will outweigh the costs of the card.