Compare frequent flyer credit cards
Property & Personal Finance Writer
There are all sorts of credit card reward programs available. These programs are meant to attract new customers, and perhaps encourage cardholders to spend a little more than they normally might. Some of the most well-known reward cards are frequent flyer rewards, which offer a host of travel-related freebies.
Smart shoppers should make a thorough comparison of frequent flyer rewards cards to make sure they choose one that will suit their needs. This can help you enjoy more benefits from frequent flyer rewards, and also get a credit card that suits the way you shop.
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What are frequent flyer rewards credit cards?
Rewards cards let you collect points every time you spend with your credit card. These points can then be exchanged for various bonuses.
Frequent flyer programs let you build up 'miles' when using airlines, which you can use to get free or discounted tickets.
A frequent flyer rewards credit card combines these two ideas. By using your frequent flyer credit card, you can build up points without having to set foot on a plane until you're ready to fly. In many cases, you can even earn extra points by spending money with partner companies.
Some of the benefits you may be able to trade your points for include:
- Discounted flights
- Hotel bookings
- Flight upgrades
- Baggage upgrades and priority delivery
- Extended warranty
- Travel and medical insurance
You may be able to earn these frequent flyer reward points by:
- Flying with the airline your card is linked to and their partner airlines
- Using your frequent flyer rewards credit card for your everyday spending
- Spending money at partner supermarkets and stores
What are the benefits of frequent flyer rewards credit cards?
The main benefit of frequent flyer rewards credit cards is the chance to get discounts on flights and related products and services. This could potentially save you a lot of money if you're a globetrotter.
This type of card often benefits big spenders who use the frequent flyer program to reward their normal spending behaviour. The more you spend, the more rewards you could earn.
It’s also important to be careful not to spend too much money while you’re chasing reward points. For those rewards to remain valuable, you should always aim to pay your card off on time, so you’re not ‘buying’ rewards with high interest charges. It’s important to maintain personal financial discipline, just as you would with a regular credit card – perhaps even more so.
What sort of credit card do you need?
Check RateCity's Credit Card guide to get the lowdown on credit cards.
What should I know about frequent flyer rewards credit cards?
Before you sign up for a frequent flyer rewards credit card, there are a few points to keep in mind:
- Frequent flyer rewards credit cards tend to have higher interest rates and fees than more basic credit cards. Try to work out if the value of the rewards you may earn will be worth more than these extra costs, so the card can effectively “pay for itself”.
- Read the terms and conditions so you know if there are restrictions on how you can use your points.
- Check your credit history, as applicants with bad credit are less likely to be approved.
- Ask yourself if you're the kind of person who would truly make the most of a frequent flyer rewards program.
Now you're ready to compare frequent flyer cards.
How do I carry out a frequent flyer rewards comparison?
To compare frequent flyer rewards credit cards, try to look at the following:
- The offers themselves – what kind of rewards do you get with each card?
- How efficient is the point system? Is it more difficult to earn rewards with some cards than it is with others?
- Do any cards offer generous introductory rates?
- What are the caps and expiration dates on the points?
- Do you shop at the card’s partner stores?
- What are the rates, fees and other features and benefits of the card like?
If you have a bad credit score, you might encounter two main problems. First, the lower your credit score, the more likely you are to be rejected when you apply for a loan or any other credit product. Second, if your application is accepted, the less likely you are to qualify for the lowest interest rates.
The reason Equifax, Experian and Illion use different scores is because they are independent companies with their own different methodologies. As a result, a score of, say, 700 would mean different things at different credit reporting bureaus.
However, the one thing they have in common is that they divide their scores into five tiers. So if you receive a tier-two credit score from one bureau, you will probably receive a tier-two score from the others, as well.
Yes, as credit card providers look at your annual income amount as well as your occupation. Minimum income requirements tend to be between $30,000 – $40,000 for standard and rewards credit cards, however low income credit cards can have minimum income requirements as low as $15,000 per year.
There are two reasons you should check your credit rating: so you have a better understanding of your financial position, and so you can take action (if necessary) to improve your credit rating.
Lenders use credit ratings or credit scores to assess loan applications. The higher your score, the more likely you are to get approved, and the more likely you are to be charged lower interest rates and lower fees. Conversely, the lower your credit score, the less likely you are to get approved, and the more likely you are to be charged higher interest rates and higher fees.
Credit cards are a quick and convenient way to pay for items in store, online or over the phone. You can use a credit card as a cashless way to pay for goods or services, both locally and overseas. You can also use a credit card to make a cash advance, which gives you the flexibility to withdraw cash from your credit card account. Because a credit card uses the bank’s funds instead of your own, you will be charged interest on the money you spend – unless you pay off the entire debt within the interest-free period. If you pay the minimum monthly repayment, you will be charged interest. There are many different credit card options on the market, all offering different interest rates and reward options.
A balance transfer credit card lets you transfer your debt balance from one credit card to another. A balance transfer credit card generally has a 0 per cent interest rate for a set period of time. When you roll your debt balance over to a new credit card, you’ll be able to take advantage of the interest-free period to pay your credit card debt off faster without accruing additional interest charges. If your application is approved, the provider will pay out your old credit card and transfer your debt balance over to the new card.
For most Australians, there are no great barriers to applying for and getting approved for a credit card. Here are some points that a lender will consider when assessing your credit card application.
Credit score: A bad credit score is not the be all and end all of your application, but it may stop you being approved for a higher credit limit. If your credit score is less than perfect, apply for the credit limit that you need, rather than the one you want.
Annual income: Most credit cards have minimum annual income requirements. Make sure you’re applying for a card where you meet the minimum.
Age & residency: You need to be at least 18 years old to apply for a credit card in Australia, and most require that you are an Australian citizen or permanent resident. However, there are some credit cards available to temporary residents.
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.
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.
If you’re wondering about how to make a credit card online application, here are some steps to follow:
- Test the market. Many credit card options are available online. Compare providers by fees, interest and perks to ensure you’re getting the best deal.
- Complete the application. Once you’ve selected a card, head to the provider’s website and complete the online credit card application form. Forms vary by providers.
- Provide details. Most cards require you to meet age, residency, income and credit status condition, and you need to provide details like a bank account statement to prove this.
- Review details. Ensure the information you’ve entered is correct.
Property Personal Finance Writer
A property and personal finance writer, Nick Bendel covers property, loans, credit cards, superannuation, and other bank products. Nick has previously written for The Adviser, Mortgage Business, Lifehacker, Business Insider, Yahoo Finance, and InvestorDaily, and loves getting elbow-deep in the latest ABS, APRA and RBA data.