Get a bucket-load of reward points without overspending, collecting high interest or falling into debt.
A rewards or frequent flyer credit card is an easy way to get something extra back from every dollar you spend. With signup bonus points and promotional offers on the market, there are many ways you can bolster your points balance. However, there’s no point earning points if you’re going to end up paying interest and falling into debt. Use this guide to find out how you can maximise your credit card rewards without sacrificing your finances.
How to earn more reward points with your credit card
Consider these tips if you’re looking to rack up reward points fast.
- Bonus points on signup. Credit cards with signup bonus points give a quick boost to your points balance. With bonus reward points offers of up to 100,000 points, some even value to a domestic or international flight. Most bonus points offers require you to meet a minimum spend though (such as $3,000 within the first 90 days), so make sure this complements your existing spending plans before you sign up.
- Shop with bonus points partners. Give your reward points balance a serious boost when you spend at bonus partners. Shopping at bonus partners can double and even triple the earn rate. There are many different merchants linked to rewards and frequent flyer programs, so it should be pretty easy to work an opportunity to earn bonus points into your everyday spending.
- Use a dual credit card. A companion account includes a Visa or MasterCard and American Express credit card. While AMEX isn’t accepted as widely as Visa or MasterCard, it usually has a higher earn rate and can earn you more points per dollar. So a dual card can offer both wide availability and bonus points opportunities.
- Bonus points offers. As well as signup bonus points, promotional offers can also help you boost your points after you’ve signed up. For example, you can earn Qantas points when you surf the Internet by downloading the Qantas browser toolbar. Special promotions such as the American Express Vogue Fashion Night Out also present an opportunity to rack up points when shopping with partnered retailers. During the last event, American Express cardholders were eligible for a 40% discount on purchases over $50 while earning points on the entire purchase. So keep an eye out for similar offers with your provider and rewards program to maximise your rewards.
- Additional cardholders. Adding an additional cardholder to your account can quickly boost your points balance. Eligible purchases on additional cards earn points for the primary account.
Compare credit cards with bonus points offers
Rates last updated March 24th, 2017.
- Bank of Melbourne Amplify Platinum
Balance transfer offer has been changed to 0% p.a. for 12 months and is valid until 1 May 2017.
February 21st, 2017
- ANZ Frequent Flyer
Offer extension of 25k bonus points with $2,500 minimum spend + annual fee waiver for the first year
March 1st, 2017
- Qantas American Express Ultimate Card
Bonus points offer changed from 50,000 to 75,000 plus new earn rates have applied.
March 7th, 2017
How to keep your spending in check when using a rewards credit card
Use these tips to ensure you’re getting the most value from your rewards credit card.
- Create a budget. If you’re new to budgeting, a budget provides an overview of the money coming in and going out. The point of a budget is to manage your expenses so you can meet your financial commitments and save for a goal.
Create a budget so you can pay your credit card balance in full by the statement due date. The interest-free days feature is key to getting the most from your credit card rewards.
- Low or 0% purchase rates. Compare rewards and frequent flyer credit cards that feature low or interest-free promotions on purchases. You can use a 0% purchase card to pay for a holiday or renovate your home, and pay back the charges before the end of the introductory period. Interest-free credit card rewards are a bonus.
- Pay your card in full. Credit card interest charges cost you more than what you get from reward points value. If you’re paying interest charges, concentrate on paying your balance first and racking up more points second.
- Don’t shop for the sake of points. Think of credit card rewards and frequent flyer points as a virtual currency. You have to spend enough money on your credit card to recoup the cost of the annual fee in rewards value. Shopping for the sake of earning points is a quick way to end up in debt.
Jim uses the NAB Velocity Rewards Premium Card to go on holiday
Jim applied for a NAB Velocity Rewards Premium Card to take advantage of the 20,000 bonus Velocity points offer. He only needed to make one purchase in the first 90 days to be eligible for the promotion. Jim was already planning to visit Brisbane for a holiday and the 20,000 Velocity points paid for Jim’s Melbourne to Brisbane return flight.
The NAB Velocity Rewards Premium is a companion account, so Jim could take advantage of both the American Express and Visa cards. The account also features an interest-free promotion, so Jim paid no interest on credit card purchases for the first 15 months. He made sure to pay the balance before the promotional offer so that any interest didn’t counteract the value of his rewards.
The account has an annual fee of $150 p.a. so Jim will need to spend a certain amount each year to earn enough points to offset the amount he’s spending on the annual fee. Considering you need 18,000 Velocity points to redeem a $100 David Jones gift card, you could estimate that Jim needs to charge $27,000 worth of eligible purchases to the NAB Velocity Rewards Premium American Express card to recoup the cost of the annual fee the following year. As Jim spends an average of $3,000 on his credit card each month, he knows that he’ll be able to meet this threshold to take full advantage of his card’s rewards program.
There are many different ways to grow your reward points balance. While signup bonus points can give your balance a quick boost in the first year, you’ll have to spend more in the second year to cover the price of the credit card annual fee. The important thing is to avoid spending for the sake of earning points and avoid collecting interest which will negate the value of your rewards. Rewards programs do have their benefits, but they’re not worth collecting debt for.