The credit card mistake too many frequent flyers make
Also: why 27% of us think we're not getting a good deal.
Yesterday research firm J.D. Power released its 2018 Australian credit card satisfaction study. The figure that jumped out at me? A whopping 89% of people don't understand the terms and conditions associated with their cards.
I know: reading through terms and conditions is nobody's idea of a good time. But if you're hoping to take advantage of bonus points offers, you'll need to make sure you know what the deal is. And it's not just a case of knowing that you have to spend (for example) $3,000 in the first three months after approval to score those sweet extra points.
You also have to make sure that the money is "eligible spending". For instance, you can't easily pay your tax bill with your credit card, and even when you can, it generally won't count for points-earning purposes. The same applies to gambling transactions and cash advances, a category which includes not just grabbing actual cash from an ATM but also buying foreign currencies or gift cards.
Another key condition to be aware of: any caps that apply to earning points from your credit card transactions. For instance, picking a random example, on the Qantas Premier Everyday Mastercard you can only earn points on the first $3,000 you spend each month. That will be a comfortable limit for many people, but if you routinely spend more, a different card with a higher cap would make more sense.
The other noteworthy figure in the study was that 27% of people think they're getting a worse deal from their rewards credit card than they were a year ago. I assume that's a hangover from the interchange fee regulations which kicked in from July 2017, and which saw many cards reduce their earning potential or go off the market altogether.
While 27% of people being unhappy isn't ideal, it's actually a drop from 52% in the previous year's study, which was when many of the changes were actually announced. To make sure you're in the happy camp, spend time researching your credit card carefully before signing up.
Angus Kidman's Findings column looks at new developments and research that help you save money, make wise decisions and enjoy your life more. It appears regularly on finder.com.au.