From spending requirements to ineligible purchases, here’s everything you need to know to take advantage of credit card bonus points.
Here, we look at the common conditions you need to meet to get introductory bonus points from a credit card, the types of spending that could help you achieve it and how to figure out if it’s worth it based on your circumstances.
What are the spending requirements for credit card bonus point offers?
Every credit card bonus point offer has specific requirements around spending as well as other conditions you need to meet before you can enjoy the extra rewards. The following are the most common conditions:
- A minimum spend. For example, you might have to spend $3,000 on the card when you first get it to be eligible for bonus points. Occasionally, there are offers that give you bonus points after your first purchase (regardless of the dollar value), but those offers are less common than ones with set spending amounts.
- Eligible purchases. The minimum spend required to get bonus points usually relates to eligible purchases only. These can vary between cards, but they usually include everyday spending on groceries, petrol, dining and retail shopping. Common exclusions are cash advances, BPAY transactions and government charges.
- A time limit. These offers are only available for a limited time, so you have to apply for the card before the promotion ends. Once you get the card, there is also usually a deadline for reaching the spend requirement, for example, within the first three months.
- New customers only. Signup bonus points are only available for new credit card customers. That means if you already have a card with the same provider or have been a customer in the past 12 months, you may not be eligible for the extra points. Check the definition of new customer before you apply to make sure you are able to get these points.
Tips for meeting bonus point minimum spend requirements
Some of the most common strategies people use to meet the minimum spend requirements include paying for travel bookings, purchasing big-ticket items such as furniture or using your card for bill payments. If you’re looking for ideas on how to meet minimum spend requirements, remember that it’s important to only spend what you can afford. Sticking to purchases you would normally make anyway, such as grocery shopping and fuel spending, can be a practical and cost-effective way to meet bonus point offer requirements without blowing your budget.
Avoiding interest charges should also be a priority. So before you pull out your plastic to meet the bonus point spend requirement, consider the following steps:
- Budget for repayments. Make sure you look at how much you’ll have to pay off your card to avoid interest when you’re meeting the minimum spend requirements. For example, if you have to spend $3,000 in 3 months, you would need to put $1,000 a month or around $250 per week towards your credit card balance.
- Set up auto-pay for your credit card. Set repayments up so that they automatically come out of your nominated bank account by the due date on each statement. If you’re using your credit card more so you can meet the bonus point minimum spend, then opting to pay the full amount automatically will help keep your account debt-free.
- Transfer money as soon as you make a purchase. If you’re using your credit card for purchases you’d normally make with a debit card, this pay-as-you-go method will help you keep your balance in check. Just use your credit card for purchases, then log in to your Internet banking account and transfer the same amount from your everyday bank account to your credit card to keep your balance clear.
Are there purchases that won’t count towards minimum spend requirements?
The minimum spend requirement for bonus points usually only applies to eligible purchases you make with your card. This means some transactions won’t count towards this amount. While eligible spending varies between cards, transactions that are usually not eligible for the bonus point spending requirement include the following:
- Cash advances. As well as ATM withdrawals or getting cash out at the register, cash advance transactions can include foreign currency purchases, transfers between accounts and gambling transactions. Be aware that these transactions also attract the cash advance interest rate and a cash advance transaction fee that will add to your account costs.
- Gift card purchases. Many credit card providers consider the purchase of gift cards and prepaid debit cards as cash advance transactions. So if you were thinking of buying gift cards as a way of meeting the bonus point minimum spend, make sure you check with the card provider or refer to the credit card reward program terms and conditions to find out if this is possible.
- Balance transfers. Balance transfers let you move existing debt onto a new card, which means they’re technically not purchases and won’t count towards your minimum spend requirement.
- BPAY Payments. Many credit card providers and reward programs exclude BPAY transactions from earning points, including CommBank Awards, Westpac Altitude Rewards and St.George Amplify Rewards. But even if BPAY transactions are not excluded, they may be processed as a cash advance (depending on how the biller has set up BPAY Payments), which means you still wouldn’t get points.
- Bill payments. Most credit card providers exclude bill payments made over-the-counter at the bank or at Australia Post from earning rewards. Check the other payment options available for your bills and refer to our guide to see if they’ll count towards the minimum spend for your credit card.
- Government charges. Most credit cards won’t earn points for government charges, including those made to the Australian Taxation Office. There are some exceptions, such as the American Express Explorer or the American Express Essential credit cards. But even these may have specific requirements that limit your options for meeting the minimum spend amount by paying government bills.
Bonus point spending fail
Jacinta is looking for a way to earn more Qantas Points with a credit card. After comparing products, she decides to get the HSBC Qantas Platinum, which offers 60,000 bonus points if you apply by 31 October 2017. It also has a spend requirement of $3,000 within the first 3 months of account opening.
Jacinta plans to meet this spend requirement by using her HSBC Qantas Platinum to pay the following bills over one month:
- Electricity: $600
- Mortgage: $2,500
- Total: $3,100
Jacinta uses BPAY to pay her bills without realising that the terms and conditions exclude these types of transactions. This means her bill payments don’t count towards the eligible spending required to get bonus points or even to earn points per dollar spent. So Jacinta now has $3,100 to pay off on her card, without any points to show for it.
Is it worth spending this money for bonus points?
In some cases, the amount of money you spend meeting minimum spending requirements for a bonus point offer could outweigh the value of the rewards. You can look at the following details to help decide whether or not a bonus point offer is worth it:
- Potential interest charges. Look at the purchase interest rate and the minimum spend amount to estimate how much you could end up paying for each month you carry a balance from meeting this bonus point requirement. For example, if the spend is $3,000 in 3 months on a card with a 19.99% p.a. purchase rate, you would be charged around $49.80 per month on the balance.
- The annual fee. Reward and frequent flyer credit card annual fees can quickly outweigh the value of rewards, even if you’re getting thousands of bonus points.
- What rewards you could use points to redeem. You can consider the value of the points based on what rewards you want to redeem to decide if this fee is worth it. For example, you could use 50,000 Qantas Points for a business class return flight from Perth to Auckland. In comparison, purchasing this fare would typically cost around $1,100 to $1,500 (based on a fare search on 15 February 2017).
Compare credit cards with bonus points offers
Other factors to consider
As well as considering the bonus point offer, it’s important to look at the other features of the new credit card you’re interested in applying for. The following are the key details to compare:
- Purchase rate. The purchase rate is particularly important when there is a minimum spend required for bonus points. Remember to check if there is an introductory purchase rate, and make sure you find out the standard variable rate for purchases that will apply at the end of any promotional period so you can accurately estimate the interest costs.
- Balance transfers. If you’re planning on using the card to pay off existing debt, make sure you look at the introductory balance transfer rate, the length of time that it applies and the revert rate. Also remember that any repayments you make will go towards the debt with the highest interest rate first, such as the purchases you make to meet the minimum spend. This could mean you end up with more ongoing debt and interest charges in the long term.
- Cash advance rate. Most cards charge a different rate for cash advances. Even if you don’t plan to use your card for this type of transaction, it’s good to check this rate and the specific transactions your provider classifies as cash advances.
- Reward earn rate. This is the standard amount of points you earn per dollar spent and affects the ongoing value of the card. Think about how much you’ll usually spend on the card and the points that you will earn to decide if the program offers value beyond the bonus point offer.
- International transaction fee. If you plan to use your card for purchases overseas or online with an international retailer, be aware that most cards charge a fee ranging from 2-4% of the total transaction amount. Check this fee before you get a card to decide if it’s worth it.
- Complimentary extras. Many reward credit cards come with perks such as complimentary insurance, concierge services and airport lounge access. These features can add value to your account if you use them, just remember to weigh the benefits against the costs from the annual fee or interest charges.
Meeting the minimum spend through everyday purchases
Bonnie has just been approved for the American Express Velocity Platinum, which also includes an offer for 50,000 bonus points if she spends at least $1,500 in the first 3 months. She decides to use this card for the following weekly expenses:
- Groceries: $200
- Petrol: $50
- Total: $250 per week
This means Bonnie’s weekly spending on her card totals $1,000 per month, allowing her to reach the minimum spend requirement of $1,500 in just 6 weeks. As Bonnie would normally use her debit card for these expenses, she simply transfers $250 from her bank account to her credit card each week so she can also avoid interest charges on the balance.
Credit card bonus point offers can give you hundreds of dollars in extra value but only if you can meet all the promotion requirements. If the minimum spend is more than you normally spend on a card, it may not be worth it. So weigh up all the costs of each card to decide if it will suit your budget and your goals.Back to top