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What are credit card rewards?

What are credit card rewards?

A rewards credit card is a type of card that allows you to earn points on your transactions, and then redeem them for various ‘rewards’.

There are a multitude of different ways credit card companies will give back to their customers, and it’s important to choose a rewards card that suits your interests.

The different reward types include:

  • Travel rewards: Frequent flyer miles, flight upgrades, travel insurance, accommodation and transport.
  • General rewards: Electronics, appliances, fashion items, tickets to stadium events etc.
  • Cashback: This is when you receive credits on your card based on a percentage of what you’ve spent and how you’ve spent it. This can include earning a percentage of your retail purchase back, supermarket vouchers and more.

How do credit card rewards programs work?

Rewards programs operate under a points system, in which specific transactions earn a range of points. Points are then redeemed in a rewards store for such things as a new TV, a gift card or a microwave. The points value of your transaction depends on your credit card company’s policy, but they can range anywhere from 0.5 – 3 points per dollar spent.

There are many ways you can earn points. Some cards will offer you bonus points when you sign up for the card, or when you spend a specific amount in a specific timeframe. You may also be eligible for points when you spend money at specific retail or grocery stores.

Hey big spender!

Be aware that credit card companies often cap the amount of points you can earn. If you’re looking to get as much bang for your buck as possible, look for a credit card that does not have point caps.

Points can also expire, so double check if this applies to your rewards credit card as you don’t want to have spent a long time saving your points only to lose them all.

What credit card rewards traps should I avoid?

They say the best things in life are free, but this isn’t always the case with rewards cards.

Rewards credit cards notoriously have some of the highest annual fees out there. To avoid getting stung, choose a card with points that will cover the cost of your annual fee.

They also carry higher interest rates than your standard credit cards, so if you’re the kind of person who can have trouble paying your bill each month, rewards credit cards may not be for you. 

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Learn more about credit cards

What's the best credit card for rewards?

There is no one-size-fits-all best rewards credit card. It's best you research what type of rewards program you'd like, as well as the fees, interest rate and conditions associated with those types of cards before making a choice. 

Rewards credit cards can also come with high annual fees that may end up nullifying the rewards, so think how often you use the card to decide whether the benefits outweigh the extra cost for you. A card with a lower annual fee might require a lot of spending to get any useful rewards, while another card with a higher annual fee might need fewer purchases to get a reward. 

What should I do if my ANZ credit card has expired?

Your ANZ credit card is considered expired only after the last day of the month and year marked on your card. For instance, if your card’s expiry date reads 03/22, it is valid until 31 March 2022 and expires on 1 April 2022. Typically, you should have received a new credit card by that date, and you won’t have to request a new card. 

Once you get the new card, you should remember to switch any automatic payments you have - such as a utility or mobile phone bill - from your expired credit card to your new credit card. Equally, if you are using CardPay Direct to repay your ANZ credit card debt, you may need to update the credit card account details for that service as well. 

In case the new card doesn’t arrive by the expiry date of your current credit card, you can call ANZ on 13 22 73 to find out the reason and if you need to request an expedited card. Please note that if you were planning to close your credit card account or request a credit card upgrade, you may need to call ANZ at least before the 25th of the month your current credit card expires in, as that’s when they may send you the new credit card.

What should you do when you lose your credit card?

Losing your credit card is a serious situation, and could land you in financial trouble. Here is a simple guide detailing what to do when you lose your credit card.

Lock you card – Contact your provider and inform them about your lost credit card. From here lock, block or cancel your card.

Keep track of transactions – Look out for unauthorised credit card transactions. Most banks protect against fraudulent transactions.

Address recurring charges – If your card is linked to recurring charges (gym membership, rent, utilities), contact those businesses.

Check credit rate – To ensure you’re not the victim of identity theft, check your credit rating a month or two after you lose your credit card.

Can a pensioner get a credit card?

It is possible to get a credit card as a pensioner. There are some factors to keep in mind, including:

  • Annual income. Look for credit cards with minimum annual income requirements you can meet. 
  • Annual fees. If high fees are a concern for you, opt for a card with a low or $0 annual fee. 
  • Interest rate. Make sure you won’t have any nasty surprises on your credit card bill. Compare cards with a low interest rates to minimise risk.