Why you might have to wait longer to get your credit card bonus points

From staggering the spend requirements to dividing bonus points over two years, banks are resorting to complex strategies to convince customers to stay.

Banks have been using big bonus points offers to attract new credit card sign ups for years. But in recent months, we've seen Australian card issuers shake up the strategy to keep customers for longer.

Previously, most banks would reward new credit card holders with bonus points when they met a spend requirement in the first few months. For example, the new customer might have to spend $1,500 in the first 3 months after approval to get the bonus points.

This meant that some savvy points chasers would get a new card every year or couple of months to bank more bonus points. They'd use the card to meet the spend requirement, nab their bonus points and switch for a different card with an introductory offer before they had to pay the next annual fee. This strategy is referred to as credit card churning.

However, a new rewards model is making it more difficult to collect your bonus points and ditch your card so quickly. Nowadays, it's not uncommon for frequent flyer credit cards to have staggered bonus points offers. These cards offer up to a certain number of bonus points which you can earn if you spend a set amount each month for a specific number of months or after you've paid the second year annual fee.

We've broken down how these strategies work with a few examples of them in action below.

Drip feeding bonus points over a few months

These cards require cardholders to meet a set minimum spend requirement every month for the first 6 to 12 months. One Suncorp credit card currently offers 10,000 bonus Rewards Points every month you spend at least $1,500 on eligible purchases for the 6 months. This brings the total bonus points bounty to 60,000, but you'd also have to spend $9,000 to get there.

Bank of Queensland has a similar offer that runs over 12 months. New BOQ cardholders will receive 1,000 bonus points each month they spend $1,000 on eligible purchases in the first 12 months, bringing the bonus points total to 12,000. This card has a $0 first year annual fee and the standard $129 p.a. annual fee is waived when you spend $12,000 in the previous 12 months. However, this is still a large spend requirement for a relatively small number of points.

Rewarding bonus points after the first 12 months

Some banks stagger these introductory points offers so that cardholders have to pay the annual fee more than once before they reach their full bonus points potential. For example, A Qantas Money credit card is currently offering a total of 100,000 bonus Qantas Points staggered over two years. You'll earn 70,000 bonus points when you meet the spend requirement in the first 90 days and then an additional 30,000 bonus points after you pay the second year annual fee. With this particular offer, the annual fee is $149 in the first year and $299 p.a. after that.

Some St.George, Bank of Melbourne and BankSA credit cards are also promoting a similarly structured offer right now. You will earn a total of 100,000 bonus Amplify Rewards over two years (50,000 points per year) when you spend $6,000 on eligible purchases each year. These cards charge a standard $99 annual fee, so you'd pay this twice before you got your total number of points (except for the online St.George offer, which has a $0 first year annual fee).

Citi has a few offers that reward cardholders with bonus points each month they meet the spend requirement for the first 20 months. For example, one card gives cardholders 15,000 bonus Citi Rewards points per statement period they spend at least $1,000 on eligible purchases for the first 20 months. So you can earn up to 300,000 bonus Citi Rewards over the 20 months. This also means that cardholders have to pay the annual fee twice (which is currently $195 in the first year and $395 p.a. after that) if you're earning the maximum number of bonus points.

Why are banks using these strategies?

These bonus points models are used to retain customers for longer, encourage them to spend more and stop them from churning and burning their cards. Rather than being lured in by the total number of bonus points on offer, consider the spend requirements and annual fees you'll have to fork out to get the maximum rewards before you apply.

Although these staggered bonus points offers seem to be an emerging trend, there are still a number of cards that reward the total number of bonus points in the first year. This is why it's important to compare your options before you commit to a card. You can get started by comparing the frequent flyer and rewards credit cards available on Finder.

What's the upside?

While this could potentially restrict the number of bonus points offers you can take advantage of in a year, it could be good news for frequent flyers' credit scores. Each time you apply for a credit card, it's listed as a hard enquiry on your credit report. Too many hard enquiries in a short period of time can drag down your credit score. If frequent flyers and rewards chasers are being forced to hold onto their credit cards for longer, this could give your credit score some much needed breathing room.

Before you apply for a new credit card to take advantage of a bonus points promotion, you should check your credit score to determine your likelihood of approval before you start the application. You can check your credit score and report for free through Finder and can receive updates every time something changes on your credit report to stay on top of your finances.

If you're not a regular credit card churner and don't mind having the same credit card for more than a year, these credit cards could be right for you. As long as the spend requirements meet up with your budget and the bonus offer line up with your points goals, you can still reward your spending with one of these offers.

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