Getting Value From Credit Card Reward Programs
Posted August 5th, 2009 and last modified June 8th, 2011Credit card reward programs promise us the world when it comes to pay back but many consumers are not so sure about the benefits of reward programs as more seem to struggle to rack up enough benefits or points on these systems.
According to experts, reward programs are only ever going to work for the consumer if they pay their bill on time and spends plenty on the card.
Hey big spender: Hail the credit card reward programs.
Big spenders can easily afford to rack up thousands of dollars on their cards. After all, shopping for them is a mere reason to spend time.
For most consumers this is simply not possible. Besides having bills to pay, lives to live and mouths to feed, many just don’t have the cash left (ahem credit), to take advantage of these reward programs.
Pay up monthly for reward programs brownie points.
People who can afford to pay of their rewards card in full each month and never incur any interest will be able to take advantage the most from these credit card reward programs
Everybody else is probably just wasting their energies and time to use these cards.
Canstar Cannex has long praised the advantages of some card providers over others and it is clear that not every offer is in the best interest to consumers.
Common traps exposed:
High annual card fees, reward levels and a minimum spending limit are just a few of the most common reward programs traps.
The best way to figure out what card is right for you – if all – is by carefully reading all the offers including the small print.
A Choice spokesperson, Christopher Zinn said that unless a person were spending at least $2,000 a month on their rewards credit card, they needn’t bother with them because the resulting rewards were not worth the effort.
By surveying a total of 63 rewards cards, the company found it would take some five-and-a-half-years to earn enough points for a $500 digital camera. If you wanted to buy a $50 toaster you’d have to spend around $6600 first.
According to Zinn, most of these cards are based on ‘marketing hype.’ He said: “In general, the more you splurge, the more you benefit. Spend $5000 a month and your best option is Qantas or Virgin Australia’s Velocity points – worth about $1200 a year, even after deducting the annual fee.”
“‘On the other hand, at a spending level of only $1000 monthly, you could be in the red by up to $760 a year.’”
Shopping voucher rewards for retail:
Store cards have increasingly become more popular with the Australian public. David Jones has joined forces with American Express, and Woolworths offers a card through MasterCard.
Many of these store bought points can them be redeemed for gift cards, and while they are limited to the participating stores, they can still offer value according to Zinn.
For example, if you spend $1000 to $2000 a month, then the Myer Visa gives the best value but if you spend between $2000 and $5000 then the David Jones card offers a better reward system, found the survey.
Woolworths MasterCard (a relative newcomer,) was judged the most flexible of the three main retail cards.
“On average, you need to notch up at least $2000 in purchases a month to get any positive return,” Zinn said.
Before you opt for a certain credit card reward program it is definitely recommended you look into their terms and conditions first.
Source: News.com.au
Check out today's featured offers:
| Westpac Low Rate | Citibank Clear Platinum | Qantas AMEX Discovery | ANZ Platinum |
 |
 |
 |
 |
0% p.a. for 6 months on purchases & balance transfers |
2.9% p.a. for 12 months |
$0 annual fee Up to 10,000 Bonus QFF Points |
0% p.a. for 6 months on purchases & balance transfers |
|
|
|
|
Subscribe to our newsletter and get "The Ultimate Guide to Balance Transfers"
If You Like This Post...
Get all the latest deals, guides and loopholes go in Credit Card Finder's free bi-monthly email. Don't miss out - join the thousands who get it emailed!
Ask A Question