The days of getting something for nothing are long gone.

Nowadays, you have to spend at least $20,000 a year to earn a meagre $100 gift card on your rewards credit card, according to new research from comparison site Mozo.

Rewards used to be a much better value proposition. The value of rewards for each dollar spent on credit cards has been falling for years and has taken a turn for the worse in the past year, according to a recent report in the Sydney Morning Herald.

“Typically, for each dollar spent the reward is worth about half a cent.”

“It should prompt anyone with a rewards card to think hard about the value they are getting, especially as the annual fees and interest rates are generally higher on rewards cards than on non-rewards cards,’’ said SMH.

The annual fee on a rewards card is about $177 – about four times the average non-rewards card fee.

According to Mozo, about two-thirds of the 1600 rewards card holders told the site they would abandon their rewards card if the value of the rewards fell further.

About two-thirds told Mozo that they do not spend enough in a year to even earn a $100 gift card and that it takes too long to earn enough points for a worthwhile reward.

While the value of the rewards has been declining, the annual fee of the card has been rising steadily.

And if they do not pay off their credit card debt, they are charged a higher interest rate of 19.78 per cent compared to 14.1 per cent for non-reward cards.

This has prompted some people to abandon their rewards card and take out a vanilla card with no annual fee.

The only way to assess if your rewards card is worth it, is to work out the net benefit.

“The rule of thumb is if you have revolving debt on a credit card, then a rewards card is not for you.

“Those spending less than $20,000 a year, really have to make a considered choice on whether the rewards are worth it,’’ Canstar’s research manager Mitchell Watson told SMH.

Besides rewards points, he said that some premium credit cards come with extended warranty on purchases as well as comprehensive travel insurance which are more valuable to frequent flyers.

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