Buying frequent flyer points vs. earning them with a credit card

Need more points for a reward flight or upgrade? Here's how to decide if you should buy them or get a frequent flyer credit card.

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If you’re saving up points for a specific frequent flyer reward, such as a flight or upgrade, there are a few ways you can boost your point balance to reach your goal. Two of the most common options are getting a frequent flyer credit card that earns you points on your everyday spending, or buying frequent flyer points directly through the loyalty program.

While both of these options help you get enough points for your reward, the costs and requirements can vary significantly. So, to help you get the most value out of your next frequent flyer reward redemption, here's a look at how buying points stacks up against earning them with a credit card.

What's in this guide:

What are the differences between buying points and earning them with a credit card?

While both buying and earning frequent flyer points can help you get the rewards you want quickly, each option works in a different way, as we've outlined below.

Buying frequent flyer points

This option allows you to buy additional points when you have a specific reward in mind. Each frequent flyer program has its own terms and conditions around buying points for rewards, but the key factors you need to consider are:

  • Dollar value. You pay a set price for the amount of points that you want to buy. For example, $40 for 1,000 points. Some frequent flyer programs, including Qantas and Velocity, offer you greater dollar value if you buy more points. Others, such as Asia Miles, have a set price for points regardless of how many you buy.
  • Redemption requirements. Most frequent flyer programs limit how much of your redemption can be made up for purchased points. For example, Qantas allows you to buy additional points worth up to 20% of the intended reward, while Velocity allows you to buy points worth up to 50% of the amount already held in your account when you choose how you think you'll use them. Both programs only allow you to buy points up to two times per year.
  • Minimum purchase. Some programs have a minimum amount of points you have to buy, even if you need less than that amount. For example, Emirates Skywards requires a minimum purchase of 2,000 miles at a cost of USD$80. So, even if you only need 1,000 miles for your reward, you still have to pay the full USD$80.
  • Instant redemption. Most frequent flyer program require you to use your purchased points on a reward straight away or within a limited time frame.
  • Promotional offers. Sometimes frequent flyer programs may run a promotion around buying points. For example, you could be able to get 15% off the standard price of points, or 5% extra points based on the amount you purchase. Keep an eye out for these types of offers so you can get more value from buying points.
  • Non-refundable. Purchased points are non-refundable.

Buying frequent flyer points is designed as a quick solution if you don’t have enough points to reach your rewards goal. It’s also convenient if there is a time limit on when you can use your frequent flyer points. For example, if you have an upcoming flight that you’d like to upgrade using points, or if your point balance is due to expire.

Example: Buying points for a flight

guy with luggage in tow

Say you're going on a trip from Melbourne to Auckland and want to upgrade a return Virgin Australia Getaway economy fare to a Business Class fare. To redeem this reward, you'd need a total of 32,000 Velocity Points but your current balance is only 28,200 points. In this case, you'd be short by 3,800 points.

With only 14 days before your flight, you could decide to buy the remaining points for your reward upgrade. As Velocity only allows points to be bought in blocks of 500, you could purchase 4,000 points at a cost of $135 to upgrade your flights.

Earning points with a frequent flyer credit card

This option allows you to earn frequent flyer points through everyday spending on a credit card. If you're thinking of using this option to collect more points, these are the main factors to keep in mind:

  • Bonus points. Many cards offer thousands of bonus points as an introductory offer for new customers, which can fast-track your frequent flyer rewards. Usually you have to sign up and spend a specific amount of money in the first few months to claim these points. For example, a card could offer you 50,000 frequent flyer points when you spend $5,000 in the first 3 months.
  • Earn rate. Frequent flyer credit cards offer you a set number of points per $1 spent on eligible purchases. For example, 0.5 points per $1 or 1 point per $1 spent.
  • Eligible purchases. Generally, most of your everyday credit card spending will earn frequent flyer points. Common exclusions are cash advances, BPAY payments and government charges (including those made to the ATO). Check the frequent flyer card's terms and conditions to make sure the spending you plan to do is eligible to earn points.
  • Annual fee. Most frequent flyer credit cards charge an annual fee. This usually ranges from $100 to more than $400.
  • Points caps. Some cards limit the number of points you can earn per month or year. If you’re saving for a specific goal, make sure the points cap won’t restrict you.
  • Flexibility. While you usually need to use bought points straight away, the points you earn on a credit card can be saved up and redeemed when it suits you.

In comparison to buying points, earning points with a frequent flyer credit card is designed for more long-term value. This option is typically suited to people who regularly use a credit card and who are willing to pay an upfront annual fee for the benefit of earning points on everyday spending.

If you want to use a card to earn points for a particular goal, the most important factors are bonus point offers, as well as the amount of points you can earn each month, based on the earn rate and your average spend.

Example: Earning points for a flight with your credit card

woman waiting for flight

Imagine you're saving up your Qantas Frequent Flyer points for a trip from Sydney to Los Angeles in 6 months’ time. You'd need at least 90,000 points for a return economy flight with Qantas but your current point balance is 32,000.

With a shortfall of 58,000 points, you couldn't buy all the points you need for this reward. So instead, you compare credit cards and bonus point offers, and find a card with the following features:

  • Earn rate: 1 Qantas Point per $1 spent
  • Annual fee: $199
  • Points cap: None
  • Bonus points offer: 60,000 Qantas Points when you spend $3,000 in the first 3 months

As long as you spent at least $1,000 per month on eligible purchases with this card, you would meet the bonus point spend requirement and get an extra 60,000 Qantas Points. You'd also earn points per $1 on the $3,000 you spent, meaning you'd add 63,000 points to your account balance. This means you'd have 95,000 Qantas Points and could book your reward flight three months before your trip. You'd also continue to earn points per $1 spent on your everyday spending as long as you used this card.

Should I buy frequent flyer points or use a credit card?

man's feet up his luggage

The choice really depends on your circumstances and goals. With that in mind, we’ve outlined some scenarios where one of these options may be preferred to the other:

Buying points could be good if you: Earning points with a credit card could be good if you:
  • Are saving up for a specific reward
  • Have limited time to make a redemption
  • Only want to get extra frequent flyer points when you need them
  • Only need a limited number of frequent flyer points for your balance
  • Want to pay a fixed price for the points you need
  • Rarely or never use a credit card
  • Are saving up for a specific reward
  • Have time to earn enough points per $1 spent for your chosen redemption
  • Want to earn more frequent flyer points on an ongoing basis
  • Want to take advantage of a bonus point introductory offer
  • Can afford to pay a credit card annual fee every year
  • Already use a credit card

Comparing the cost of buying and earning frequent flyer points

woman's feet and luggage

While working out the cost of buying frequent flyer points is straightforward, it's more complicated on frequent flyer credit cards because of the different features that can affect the cost of the points you earn. As a result, there is no simple way to do a general comparison of the costs between buying points and earning them.

But you can still figure out the value of specific frequent flyer rewards, point purchases and credit cards. To do this, you need to consider the following factors:

  • The amount of points required for your reward
  • The amount of time you have before you want to redeem your reward

For buying points, consider:

  • The cost of the points if you bought them (refer to the prices listed on your chosen frequent flyer program's website)
  • The minimum number of points you can buy (for example, 500 or 2,000 points)
  • Any limits on the amount of times you can purchase points (for example, once or twice per year)

For earning points with a credit card, consider:

  • The bonus points offer
  • The annual fee
  • The standard earn rate of the card
  • Your average spending
  • Any points cap

When you weigh up all of these factors, you can tell whether you will get more value from buying points or earning them. The example below highlights how each option works.

Credit card interest charges

Note that you would also have to factor in any interest charges if you carried a balance on your credit card. For the sake of the following comparison, we’ve assumed you pay your balance in full by the statement due date each month.

Example: Buying points vs using a frequent flyer credit card

woman sitting on luggage

Say you have booked a one-way Qantas economy fare from Sydney to London and want to upgrade it to business class for a total of 120,000 Qantas Points. You already have 98,000 points, meaning you need another 22,000 points for this reward. Here's how you could compare the value of buying the extra points or getting them with a frequent flyer credit card:

  • Points required: 22,000 Qantas Points
  • Amount of time before your flight: 6 months

The Qantas Frequent Flyer program’s Top-up Points service allows you to buy points for rewards twice in a 12-month period, with a minimum of 500 points. So as long as you met these requirements, you could buy the remaining 22,000 points for $608.50.

In comparison, let's say your also considering a Qantas Frequent Flyer credit card with the following features:

  • Bonus point offer: 50,000 Qantas points when you spend $2,500 in the first 3 months
  • Annual fee: $250
  • Standard earn rate: 0.75 Qantas point per $1 spent, uncapped
  • Average credit card spending: $4,000 per month

Based on your average monthly spending, you'd meet the 50,000 bonus point requirements in the first month you have the card. You'd also earn an extra 3,000 points in that time, meaning you'd get a total of 53,000 points for an upfront cost of $250 in the form of the card's annual fee. This would bring your Qantas Points balance to 151,000 points within 5 months of your flight. To summarise the costs of buying and earning points in this scenario:

  • Buying points: $608.50 for 22,000 points
  • Earning points with this credit card: $250 (annual fee) for a total of 53,000 points in 1 month

In this scenario, you would save $358 and earn 31,000 more points by getting the frequent flyer credit card instead of buying points. You'd also continue to earn around 3,000 points per month by using the credit card for your everyday spending. But it's also worth noting that, in this case, if there was no bonus point offer, buying points could be the more valuable option.

Both buying points and earning them with a credit card can be valuable options when you’re looking for a way to get the extra frequent flyer points for a flight or upgrade. Understanding the differences between the two methods will help you choose the right option based on your personal circumstances and preferences.

Compare Frequent Flyer Credit Cards

Rates last updated August 23rd, 2019
Name Product Bonus Points Rewards Program Rewards Points per $ spent Purchase rate (p.a.) Annual fee Product Description
St.George Amplify Platinum - Qantas
60,000 bonus points
Qantas Frequent Flyer
0.5
19.74% p.a.
$99 p.a.
Earn 60,000 bonus Qantas Points when you spend $2,000 within 90 days and earn 0.5 Qantas points per $1 spent.
Qantas Premier Platinum
120,000 bonus points
Qantas Frequent Flyer
1
19.99% p.a.
$199 p.a. annual fee for the first year ($299 p.a. thereafter)
Get up to 120,000 bonus Qantas Points (20,000/month) when you spend $1,500/month for the first 6 months. Plus, complimentary lounge passes.
Virgin Australia Velocity Flyer Card - Annual Fee Offer
30,000 bonus points
Velocity Frequent Flyer
0.66
20.74% p.a.
$50 p.a.
Save with an ongoing $50 annual fee and 0% balance transfer offer. Plus, the ability to earn up to 30,000 bonus Velocity Points in the first 3 months.
ANZ Frequent Flyer Black
100,000 bonus points
Qantas Frequent Flyer
1
20.24% p.a.
$425 p.a.
Earn 100,000 bonus Qantas Points & $200 back when you spend $4,000 in the first 3 months. Plus, airport lounge passes.
Citi Rewards Platinum Credit Card
120,000 bonus points
Citi Rewards Program
1
20.99% p.a.
$49 p.a. annual fee for the first year ($149 p.a. thereafter)
Get up to 120,000 bonus rewards Points when you meet the spend requirements. Plus, save with a $49 first year annual fee.
NAB Qantas Rewards Signature Card
120,000 bonus points
Qantas Frequent Flyer
1
19.99% p.a.
$295 p.a. annual fee for the first year ($395 p.a. thereafter)
Earn Qantas Points on your everyday spending, take advantage of complimentary overseas travel insurance and a 24/7 concierge service.
Virgin Australia Velocity Flyer Card - Bonus Points Offer
75,000 bonus points
Velocity Frequent Flyer
0.66
20.74% p.a.
$64 p.a. annual fee for the first year ($129 p.a. thereafter)
Earn up to 75,000 bonus Velocity Points and save with a $64 first year annual fee. Plus, a long-term balance transfer offer.
HSBC Platinum Qantas Credit Card
Qantas Frequent Flyer
1
19.99% p.a.
$0 p.a. annual fee for the first year ($79 p.a. thereafter)
Save with a $0 first year annual fee and a long-term balance transfer offer. Plus, complimentary travel insurance.
Qantas American Express Discovery Card - Exclusive Offer
10,000 bonus points
Qantas Frequent Flyer
0.75
20.74% p.a.
$0 p.a.
Finder Exclusive:
Earn 10,000 bonus Qantas Points when you apply before 17 September 2019 and spend at least $750 within the first 3 months of card approval.
St.George Amplify Signature - Qantas
90,000 bonus points
Qantas Frequent Flyer
0.75
19.74% p.a.
$179 p.a. annual fee for the first year ($279 p.a. thereafter)
Get 90,000 bonus Qantas Points when you spend $4,000 in 90 days and 2 complimentary Qantas Club lounge invitations per year.

Compare up to 4 providers

Pictures: Shutterstock

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