Are you getting the most out of your credit card rewards?

/ personal finance

Some rewards cards come with an annual fee that could offset perks.

Credit cards are increasing in popularity across Australia, with figures from the country's central bank showing payments on plastic have steadily risen over the last 20 years1.

Reserve Bank of Australia statistics, compiled by the Australian Payments Clearing Association, showed there were an average of 223.9 million monthly credit card transactions last year1. This was up from 209.2 million the previous year and 190.7 million in 20151.

Some cards impose annual fees, which can significantly dent the value of any rewards, check with your bank to avoid paying high annual fees.

But not all customers are completely happy with their credit cards; a 2016 Mozo survey revealed that some people are particularly dissatisfied with rewards schemes2. In fact, 53 per cent of respondents claimed their card rewards were poor value2.  

However, here are several ways you can maximise the benefits of rewards programs.

Improve your credit rating

Did you know in the United States, the most lucrative rewards schemes typically go to people who have the best credit rating3?So make sure you know where you stand by ordering your own free credit report from Equifax, or investing in a subscription package to monitor your credit report over time.

Compare cards

There is a dizzying array of rewards cards available, which is why it's important to review different providers and see what perks will be most useful for your interests and likely spending levels. 

Optimise your payments

The higher your spending, the more rewards points you'll receive on a card. You should therefore try to consolidate all your payments onto a single card to maximise the benefits you receive4.

Watch out for fees

Some cards impose annual fees, which can significantly dent the value of any rewards. Calculate the amount you're likely to spend, what rewards you'll get and then offset any charges to see whether the card is still worthwhile.

You should compare rewards cards to get the best one for your needs.

Check expiry dates

The points on your card will likely expire between one and two years after you've accrued them. Read the fine print of your agreement to ensure your spending doesn't go to waste because you weren't aware of deadlines.

Pay your card off monthly

The average credit card interest rate is 14.25 per cent5. Neglecting to pay off the outstanding debt on your card each month can therefore quickly negate the benefits of any rewards due to interest charges3.

These tips could help you make the most of your rewards card, but you should always keep in mind the effect that failed payments could have on your credit reputation.

If you'd like to learn more about your Equifax credit report, please contact us today.

Disclaimer: The information contained in this article is general in nature and does not take into account your personal objectives, financial situation or needs. Therefore, you should consider whether the information is appropriate to your circumstance before acting on it, and where appropriate, seek professional advice from a finance professional such as an adviser.


1Australian Payments Clearing Association, Cards Transaction Statistics. Accessed January 2018.

2Mozo, Survey reveals consumer dissatisfaction with rewards cards. Accessed January 2018.

3USwitch, Bad-credit credit-cards with rewards? Accessed January 2018., 7 ways to get the most from rewards credit cards. Accessed January 2018.

5The Herald Sun, Credit card interest charges: Australians pay about $12.3 million a day. Accessed January 2018.

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