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What is a credit card reward points cap?

Some credit cards limit the number of reward or frequent flyer points you can earn for your spending. Here’s what you need to know to get the most out of your card.

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A reward or frequent flyer credit card is designed to offer you extra value in the form of points per $1 spent. However, if that card has a points cap, you’ll only be able to earn a certain number of points in each month or year. This can have a huge impact on the value of the card so it’s important to understand how points caps work, the different types of limits that may apply and how to tell if it will actually affect your account.

How do points caps work?

Credit card points caps are usually applied based on your spending for each statement period, or on an annual basis. For example, one card could allow you to earn points for the first $3,000 you spend in a statement period and another could cap your earnings at 100,000 points per year (approximately 8,333 points per month).

As well as this time period, there are two main types of points caps that are applied to reward and frequent flyer credit cards: hard points caps and soft points caps. We’ve explained each of these caps in detail below.

  • Hard points cap

This type of cap means you will not earn any more points once you meet the earning or spending limit on your card. A hard points cap is usually applied on an annual basis rather than a monthly one.

For example, a card could offer 1 point per $1 spent but limit it to 50,000 points per year. In this case, if you spent $52,000 on the card, you’d still only earn 50,000 points for that year.

  • Soft points cap

This type of points cap offers a reduced earn rate after you reach a specified spending limit. This type of limit is typically applied to your spending for each month or statement period.

For example, you could earn 1 point per $1 for the first $3,000 spent in a month and 0.5 points per $1 for spending over that amount. So if you spent $4,000 in a month, you would earn a total of 3,500 points: 3,000 for your first $3,000 of spending and 500 for the remaining $1,000 worth of spending.

How can I tell if a credit card has a points cap?

You’ll usually find this information in the “rewards” details for any card that you’re looking at. It’s often included with information on the earn rate for the card. Here are two examples of how they might appear:

  • Hard points cap: Earn 1 point per $1 spent up to 100,000 points per year.
  • Soft points cap: Earn 1 point per $1 spent for the first $3,000 per statement period, then 0.5 points per $1 spent after that.

This information is also included in the reward program terms and conditions booklet for each card, which you can usually get on a provider’s website. Alternatively, you can contact the provider to ask about points caps that apply to specific cards.

Points cap definitions

Credit card companies sometimes have different interpretations of what counts as a points cap. For example, some may not define a soft points caps – where the earn rate is reduced after you reach a spending limit – as a “points cap”.

So, even when the earn rate changes after you meet a set spending limit each statement period, a credit card provider may not list it as having a points cap. This makes it important for you to check all the reward details of a card before you apply and start using it to earn points.

What credit cards come with no points caps?

A selection of super-premium credit cards may offer no points caps while others may offer uncapped earnings for specific types of transactions, such as overseas spending. For dual credit card accounts, the American Express card usually has a higher cap (or no cap) when compared to the Mastercard or Visa. You can learn more about credit cards with uncapped points potential in this detailed guide.

Compare uncapped rewards credit cards

Data indicated here is updated regularly
Name Product Bonus points Rewards program Rewards points per $ spent Purchase rate Annual fee
St.George Amplify Platinum - Qantas
60,000
Qantas Frequent Flyer
0.5
19.74% p.a.
$99
Earn 60,000 bonus Qantas Points, plus enjoy 0% p.a. on balance transfers for 6 months and complimentary insurance covers. Ends 30 Sept 2020.
American Express Platinum Edge Credit Card
N/A
Membership Rewards Ascent
1
20.74% p.a.
$195
Receive a yearly $200 Travel Credit and complimentary domestic and international travel insurance, plus up to 3 Membership Rewards Points / $1.
Qantas American Express Ultimate Card
55,000
Qantas Frequent Flyer
1.25
20.74% p.a.
$450
Get 55,000 bonus Qantas Points, a $450 Qantas Travel Credit and 2 yearly complimentary Qantas Club lounge invitations.
American Express Explorer Credit Card
50,000
Membership Rewards
2
20.74% p.a.
$395
Get 50,000 bonus points when you spend $3,000 in the first 3 months, a yearly $400 Travel Credit and 2 entries per year to the Amex Lounge.
St.George Amplify Platinum
N/A
Amplify Rewards
1
0% for 7 months, reverts to 19.74% p.a.
$0 annual fee for the first year ($99 p.a. thereafter)
Save with 0% p.a. interest rates on purchases and balance transfers. Plus a $0 first-year annual fee. Ends 30 Sept 2020.
Westpac Altitude Black
150,000
Westpac Altitude Rewards
1.25
20.49% p.a.
$250
Earn 150,000 bonus Altitude Points when you meet the spend requirement. Plus, 2 yearly Priority Pass lounge invitations.
Bank of Melbourne Amplify Signature
200,000
Amplify Rewards
1.5
19.74% p.a.
$139 annual fee for the first year ($279 p.a. thereafter)
Up to 200,000 bonus points (130k in the first year & 70k in the second year) when you spend $12k/year for the first 2 years. Ends 30 Sept 2020.
American Express Business Explorer Credit Card
100,000
Membership Rewards Gateway
2
16.99% p.a.
$395
ABN holders w/ $75,000 revenue. Get 100,000 bonus points. Plus, 2 airport lounge passes.
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How can I tell if a points cap is worth it?

A points cap is a key factor when you’re weighing up the pros and cons of different reward or frequent flyer credit cards but it won’t always directly impact on the value you get from your card. Here’s how to decide if a card with a points cap will or won’t be worth it for you.

  • Consider your average credit card spending. To give you an idea of your spending, you could look at your current monthly or yearly account spending, or the expenses you’d like to put on a rewards card (e.g. all your supermarket shopping and petrol). This will help you determine if a points cap will impact on the value you get from a card.
  • Check the earn rate and when the points cap applies. You’ll only be affected by the points cap if you spend over the amount it applies to. For example, if a card allows you to earn 1 point per $1 spent up to $2,000 per month and you regularly spend $3,000 per month, it could have a major impact on your rewards.

Comparing points caps vs no points caps credit cards

Let's say you regularly spend $4,000 per month on credit and are trying to choose between two cards. Card 1 has a points cap while Card 2 doesn’t. They also have different earn rates per $1 spent and different annual fees. With these details in mind, you can compare them using the following table.

CardPoints rateMonthly points based on $4,000 spendAnnual fee
Card 1
  • 1.5 points per $1 for the first $2,000
    spent per month
  • 0.5 points per $1 for any further
    spending in the month
  • First $2,000: 3,000 points
  • Remaining $2,000: 1,000 points
  • Total: 4,000 points
$250
Card 2
  • 1 point per $1 spent uncapped
  • Total: 4,000 points
$400

While Card 2 has no points cap, Card 1’s higher earn rate of 1.5 points per $1 for the first $2,000 means that you would actually earn the same number of points per month with either of these cards.

To help make a decision, you can also look at the annual fees for each option. With the example above, Card 1 has a lower annual fee than Card 2 ($250 compared to $400). So in this case, Card 1 offers more value than Card 2, even though it has a points cap.

Other factors to consider when comparing reward cards

As well as your average spending and the points cap details, make sure you keep the following factors in mind to help find a reward card that’s worth it for you:

  • Points potential. You can multiply your monthly or yearly spending estimate by the point earn rate on your card to see how many points you’ll earn each year. For example, if a card offers 1 point per $1 and you regularly spend $2,000 per month, you could earn 24,000 points in a year (if there’s no points cap affecting it).
  • Annual fee. Ideally, the rewards and benefits you get from the credit card should be worth more than the cost of the annual fee. So once you know how many points you can potentially earn, you’ll be able to decide if a card is worth it – even if it has a points cap.
  • Interest rate. If you pay with your card and then carry a balance, interest charges could quickly outweigh the value of the rewards, so make sure you factor this in when comparing cards.
  • Complimentary extras. If there are other perks on the card you’re likely to use, such as complimentary travel insurance or airport lounge passes, they could help offset the annual fee and any interest charges you pay for the card.
  • Points expiry. Some reward and frequent flyer program points expire after a set amount of time, usually 12–24 months (or when your account is inactive). If you’ve been saving up points and don’t use them before they expire, any potential value will also be lost. You can see Finder's guide to reward points expiry for more information.

Credit card points caps have the potential to limit the value you get from a reward or frequent flyer card depending on how much you spend and the earn rate (or rates) of the card. But considering these details, along with other features of the card, will help you compare your options and choose one that’s right for you.

Image: Shutterstock

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Credit Cards Comparison

Data indicated here is updated regularly
Name Product Purchase rate Balance transfer rate Annual fee
Skye Mastercard - Exclusive Offer
23.99% p.a.
0% p.a. for 25 months
$99
Finder Exclusive
Save with 0% p.a. on balance transfers for 25 months, up to 110 days interest-free on purchases and flexible instalment plan options.
ANZ Low Rate - Exclusive Offer
12.49% p.a.
0% p.a. for 25 months with 1.5% balance transfer fee
$0 annual fee for the first year ($58 p.a. thereafter)
Finder Exclusive
Save with 0% p.a. on balance transfers for 25 months (with a 1.5% BT fee) and $0 first year annual fee.
NAB Qantas Rewards Signature Card
19.99% p.a.
0% p.a. for 6 months with 2% balance transfer fee
$295 annual fee for the first year ($395 p.a. thereafter)
Collect up to 130,000 bonus Qantas Points. Get 100k when you spend $3,000 on eligible purchases in the first 60 days and 30k after 12 months.
ANZ Platinum Credit Card
0% for 17 months, reverts to 20.24% p.a.
20.24% p.a.
$0 annual fee for the first year ($87 p.a. thereafter)
Receive a 0% purchase rate offer for 17 months and a $0 first-year annual fee. Plus, complimentary overseas travel and medical insurance.
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* The credit card offers compared on this page are chosen from a range of credit cards finder.com.au has access to track details from and is not representative of all the products available in the market. Products are displayed in no particular order or ranking. The use of terms 'Best' and 'Top' are not product ratings and are subject to our disclaimer. You should consider seeking independent financial advice and consider your own personal financial circumstances when comparing cards.

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