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I’m off to New Zealand and my bank is paying my fare!

Even though I’ve spent my whole career in financial services, I’d never really been into rewards programmes offered by credit cards.  Until now…

I’ve always been in the camp of wanting lower rates and lower fees rather than getting a credit card with the rewards bells and whistles.  My husband, however, left to his own devices, got a new credit card a couple of years ago which he handed to me as an alternative to the low rate one we’d shared for most of our 15-year marriage.

To my delight, we were having a look at our rewards statement the other day and discovered we had accumulated over 1,000,000 rewards points on the new card.  “Woo hoo! We can go travelling!”, I thought to myself, and I was right.  We only need half of these points to fly my family of 4 to New Zealand and rent a car for 2 weeks over the Easter holidays.  A trip worth about $5,000. Total bonus!

So I’m a convert.  There really is something paying for everything on a rewards card (as long as you’re paying it off each month to avoid hefty interest).  I’ve done a bit of research and found a list of rewards credit cards that you might find interesting.  There’s a number of things you need to consider though so please read on.

The types of rewards include points per dollar spent that can be redeemed for flights, hotel stays, merchandise, gift cards and cash back. The cards vary in what they offer, and you should consider your habits when deciding on the right one. If you don’t travel often, for example, there is little point in getting a card that awards points toward miles on a particular airline.

In addition, the value of award points can be deceiving: even if you do get 2 points per $1 spent on a certain credit card, you may need three times as many points for, say, a flight, than on a card that only awards one-for-one.

The best way to understand what you get is to calculate the worth of each point in dollar terms. And keep in mind that plenty of reward programs, particularly the ones that sound too good to be true, are actually betting you will not redeem the rewards at all because of potentially cumbersome restrictions they impose on redemption. Also on some cards, points will expire due to inactivity.

It is important to remember, banks do consider rewards programs an added feature, so the annual fee and the interest rate on a rewards card are likely to be higher than on a standard card.

Many cards listed in this table also offer sign-up bonus points, some offer programs that can be redeemed on any airline, and a few have added benefits for travelers, such as complimentary travel insurance.

Card

Points Earn rate per $ spent for Visa or Mastercard

Points Earn rate per $ spent or Amex card

Current sign up bonuses

Annual fee

Purchase interest rate

Balance transfer rate

American Express Explorer

n/a

2

100,000 bonus points when you spend $1,500 within 60 days of card approval

$395 p.a.

20.74% p.a.

0% p.a. for 12 months with 1% balance transfer fee

ANZ Rewards Black

1

3

75,000 bonus after you make your first purchase within 3 months of card approval

$375 p.a.

18.75% p.a.

no discount

Bank of Melbourne Amplify Signature

1.5

n/a

30,000 bonus points when you spend $2,500 within 90 days of card approval

$279 p.a.

0% p.a. for 6 months (reverts to 19.49% p.a.)

0% p.a. for 18 months

Bankwest More World

2.5

n/a

Earn 80,000 points when you are approved and spend $2,500 in 3 months

$240 p.a.

19.99% p.a.

2.99% p.a. on balance transfers for 9 months.

Citi Rewards Signature

Bonus 75,000 points when you spend first spend within 90 days.

$199 p.a. annual fee for the first year ($395 p.a. thereafter)

20.99% p.a.

0% p.a. on balance transfers for 6 months.

Coles Rewards

2

n/a

$100 off one Coles Supermarket shop

$89 p.a.

19.99% p.a.

0% p.a. on balance transfers for 6 months.

Commonwealth Bank Diamond Awards

1

3

n/a

$349 p.a.

20.24% p.a.

5.99% p.a. on balance transfers for 5 months.

HSBC Platinum Qantas

1

n/a

60,000 bonus points when you spend $3,000 within 90 days of card approval

$199 p.a.

19.99% p.a.

no discount

Virgin Australia Velocity High Flyer

1

0

30,000 bonus points allocated at 10,000 per month for 3 months where $3,000 is spent within 3 months of card approval

$144 p.a. annual fee for the first year ($289 p.a. thereafter)

20.74% p.a.

1.9% p.a. for 15 months

Westpac Altitude Black

1.25

3

50,000 bonus points when you spend $5,000 within 90 days of card approval

$395 p.a.

20.24% p.a.

no discount