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These frequent flyer credit cards have a $0 annual fee

These frequent flyer credit cards have a $0 annual fee

Want something for nothing? There are five credit cards that give you just that – provided you pay off your entire bill each month.

Between them, American Express, BankVic and HSBC have five frequent flyer credit cards that don’t charge annual fees (see table below), according to a RateCity analysis of the credit card market.

So if you limit yourself to spending that you were going to do anyway, and if you make sure you always repay your debt during the interest-free period, you’ll accumulate frequent flyer points without burning money on extra purchases, fees or interest.

There are also another four credit cards – from Westpac and HSBC – that entice customers with a $0 annual fee in the first year, before charging an annual fee from year two onwards.

ProviderCardAnnual feeInterest rate (ongoing)Interest-free days (max.)Points per $1 spent (max.)
American ExpressEssential Credit Card$014.99%551.25
BankVicQantas Visa Credit Card$016.95%552
HSBCPremier World Mastercard (Rewards Plus)$019.99%551.5
American ExpressVelocity Escape Card$020.74%551.75
American ExpressQantas Discovery Card$020.74%441.75
HSBCPlatinum Qantas Credit Card$0 for 12 months than $7919.99%551

Westpac

Altitude Platinum Bundle (Altitude Rewards)$0 for 12 months than $15020.49%453
WestpacAltitude Platinum (Altitude Rewards)$0 for 12 months than $15020.49%451
WestpacAltitude Platinum (Altitude Qantas)$0 for 12 months than $15020.49%450.5

Credit card comparisons are hard

Comparing frequent flyer credit cards can be tricky, because it can be hard to work out how many points you are likely to accumulate through your regular day-to-day spending.

For example, the American Express Qantas Discovery Card has three different earning rates:

  • 1.75 points per $1 spent with Qantas
  • 0.5 points per $1 spent at government bodies in Australia
  • 0.75 points per $1 spent on all other purchases

credit card stack 2

Another thing that makes comparisons hard is that there are not one but two main frequent flyer programs – Qantas Frequent Flyer and Velocity (linked to Virgin).

Just as 1 Australian dollar and 1 American dollar have different purchasing power, so do 1 Qantas point and 1 Velocity point. For example, a Sydney-Melbourne one-way ticket costs 8,000 Qantas points and 7,800 Velocity points (plus any additional taxes, fees and carrier charges).

To make things even more complicated, while some credit cards allow you to directly earn Qantas or Velocity points, others give you their own in-house points, which you then have to convert into Qantas or Velocity points.

For example, every $1 you spend with the HSBC Premier World Mastercard (Rewards Plus) will earn you up to 1.5 HSBC Rewards points. It then takes 2 HSBC Rewards points to ‘buy’ 1 Velocity point.

So $1 spend = up to 1.5 HSBC Rewards points = 0.75 Velocity points.

Don’t fall into this credit card trap

One trap some people fall into is buying things they wouldn’t otherwise buy, in the belief they’re ‘making money’ with these extra purchases because they’re earning frequent flyer points.

Frequent flyer points are only ‘free money’ if your credit card doesn’t cost you money to hold. That means not making extra purchases, not paying fees and not paying interest. If you meet those three conditions, then, yes, you really are getting something for nothing.

Money trap

However, making extra purchases just to earn points is the exact opposite of ‘free money’, because the amount you have to spend exceeds the amount you get back.

Take the BankVic Qantas Visa, for example, where everyday spending will earn you 0.5 Qantas point per $1.

Imagine you wanted to accumulate enough Qantas points to get a free flight from Sydney to Melbourne. In that case, you would need 8,000 points – and to save that many points, you would need to do $16,000 of everyday spending.

Effectively, then, you would need to spend $16,000 with your BankVic Qantas Visa to get a Sydney-Melbourne airfare.

However, if you were to buy the ticket with money, rather than points, it would cost just $149.

That isn’t to say the BankVic Qantas Visa is a bad frequent flyer credit card. Rather, using it (or any other card) to ‘buy’ points is a very expensive idea.

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Fact Checked -

This article was reviewed by Personal Finance Editor Mark Bristow before it was published as part of RateCity's Fact Check process.

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Learn more about credit cards

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.

How to increase your Qantas Premier credit card limit

When your income or spending habits change, you might wish to increase your credit card limit. The Qantas Premier credit card allows you to do this over the phone. You can contact Qantas Premier Card Support by calling on 1300 992 700. Unlike some other credit providers, Qantas doesn’t give you the option to increase your limit online.

Qantas will only accept your application if you have a good history of repayment and have not increased your credit or bought another credit product from Qantas in the past six months.

Before approving your Qantas Premier credit card limit increase, Qantas will perform a credit assessment on your current financial circumstances and ask why you would like to increase your credit limit.

To ensure that there are no bumps in your application process, you must provide accurate and recent information about your financial situation. You should also account for any future changes you’re anticipating which could hinder your ability to repay the loan.

Once the assessment is complete, Qantas will either approve or deny your application. If they approve it, you will need to sign a credit limit increase agreement - and you can request a written copy of the credit assessment. However, if your application is rejected, Qantas can opt not to provide a copy of the assessment.

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. 

Can I transfer money from my American Express credit card to my bank account?

If you’re an American Express credit card customer, you may not be able to transfer money from your credit card to your bank account. However, you may be eligible for cash advances, which involves withdrawing money through an ATM. 

To qualify for a cash advance, you’ll likely have to enrol for American Express Membership Rewards. Consider checking your online credit card account to see if you can withdraw a cash advance and, if so, the fees and charges you’ll incur for this transaction. 

You should remember that cash advances are different from balance transfers, which were available with some American Express credit cards earlier. Balance transfers allow customers to consolidate debt from high-interest credit cards to a credit card offering a lower interest rate. If you only recently applied for an American Express credit card, balance transfers may not be available irrespective of the card you own. 

How easy is it to get a credit 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.

How do you cancel a credit card?

It’s important to cancel your old cards to avoid any additional fees. Unless you’re doing a balance transfer, you’ll need to pay the outstanding balance before you cancel your credit card. If you’ve opted for a card with reward points, make sure you redeem or transfer the points before you close your account. To avoid any bounced payments and save yourself an admin headache, redirect all your direct debits to a new card or account. Once you’ve done all the preparation, call your bank or credit card provider to get the cancellation underway. Once you receive a confirmation letter, destroy your card and make sure the numbers aren’t legible.

How do you use credit cards?

A credit card can be an easy way to make purchases online, in person or over the phone. When used properly, a credit card can even help you manage your cash flow. But before applying for a credit card, it’s good to know how they work. A credit card is essentially a personal line of credit which lets you buy things and pay for them later. As a card holder, you’ll be given a credit limit and (potentially) charged interest on the money the bank lends you. At the end of each billing period, the bank will send you a statement which shows your outstanding balance and the minimum amount you need to pay back. If you don’t pay back the full balance amount, the bank will begin charging you interest.

Does Woolworths Qantas offer any credit card insurance?

Credit cards can be useful for managing your expenses, but they also come with other advantages like credit card insurance. Your Woolworths Qantas Platinum Credit Card may offer a host of complimentary insurance options, which include: 

  • Travel insurance: Cover for your whole family when they travel with you, with unlimited overseas medical emergency cover and $500,000 accident insurance for accidental loss of life.  
  • Purchase security insurance: If you purchase an eligible product with your Woolworths Qantas Platinum Credit Card, the cost of theft or damage that occurred within 90 days of the purchase will be covered, provided the amount doesn’t exceed the purchase price of the item or up to $2500 per event. 
  • Extended warranty insurance: If you purchase eligible goods with your Woolworths Qantas Platinum Credit Card, this complimentary insurance will extend the manufacturer’s Australian warranty by up to 12 months. 
  • Global hire car excess waiver: If you’re legally liable to pay an excess or deductible in the event of loss or damage to a rental vehicle that was booked using your Woolworths Qantas Platinum Credit Card, the costs will be covered. 

To find out more about Woolworths Qantas credit card insurance, you can call them on 1300 10 1234. 

Does ING increase credit card limits?

You may want to increase your credit card limit for many reasons, such as having access to more spending money. However, if you are using the Orange One credit card issued by ING, you may not be able to do so. 

ING customers can choose a credit limit of their preference when applying for the Orange One credit card. Depending on your financial situation, this limit can be anywhere between $1,000 and $30,000. If you qualify for a Rewards Platinum card, the minimum credit card limit will likely be $6,000. 

Ideally, you should set your credit card limit knowing how much you can afford to repay each month and keep your expenses lower than this level. With most credit cards, you should have the option of requesting a credit card limit increase at a later time, although you will need to qualify for any increase. With an ING credit card, limit increases are out of the question (at the time this was published), which means you may want to apply for a higher credit card limit from the beginning. Remember that you have the option of decreasing your ING credit card limit at a later time.

How to get a free credit card

There's no such thing as a free lunch. All credit cards come with associated costs when used to make purchases, even if it’s simply the cost of making repayments.

However, many lenders offer incentives for customers such as a $0 annual fee or 0 per cent interest on purchases during an introductory period. Additionally, paying off your balance in full during an interest-free period means you could only have to pay back the cost of purchases without interest. You could also be eligible for additional rewards such as cashback during that time, saving you more money.

How many numbers are on a credit card?

The numbers on your credit card actually follow a universal standard which is used to identify specific functions. Each credit card has a different amount of numbers. Visa and Mastercard have 16, American Express has 15 and Diner’s Club has 14. 

The first number on a credit card always identifies what type of credit card it is. Visa cards start with a 4, whereas Mastercard starts with a 5 and American Express with a 3. The remainder of the digits represent the account number, including the last number which is used to verify that your credit card is actually valid. 

Credit cards also have additional verification numbers, which are mainly used when the card isn’t present for phone and online purchases. These are the three-digit numbers on the back of Visa and MasterCard or the four-digit numbers on the front of an American Express card.

Do I get HSBC credit card insurance on purchases I make?

As an HSBC credit card (HSBC Platinum, HSBC Platinum Qantas and HSBC Premier World) cardholder, you may be entitled to complimentary international and domestic travel insurance. This HSBC credit card insurance covers you for hospital stays and medical expenses, flight cancellations or delays, as well as lost luggage or personal items.

To be eligible for the insurance, you should have paid for at least 90 per cent of your overseas return travel ticket with your HSBC credit card. The cover is automatically activated without a need to contact HSBC. However, it’s always best to let your card issuer know when you travel overseas. If you have pre-existing medical conditions, you’ll need to contact Allianz directly to organise cover for these as they aren’t covered by the insurance. You can call Allianz on 1800 648 093.

The complimentary international travel insurance that comes with your HSBC Platinum credit card is valid for up to four months from the date of your departure from Australia. Your HSBC credit card insurance cover also covers your spouse and dependent children if 90 per cent of their travel ticket is purchased using your HSBC card.

 

How do you use a credit card?

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.

What should you do if your credit card is compromised?

Credit card fraud is a serious problem. If your credit card is compromised and you’re wondering what to do, here are a few precautionary steps to take.

Contact you credit provider – Get in touch will your credit card provider. If you feel your card has been compromised, you should be able to lock or block it.

Monitor your accounts – Keep an eye on your credit card accounts. Any unauthorised transactions could be a sign your credit card has been compromised.

Check your credit rating – It’s also important to check your credit rating, to ensure you’re not a victim of identity theft or some other financial mischief.