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One in three Aussies losing money on rewards credit cards

One in three Aussies losing money on rewards credit cards

How rewarding is your rewards credit card? Possibly not very, according to a new study from ME, which found that for over a third of Aussie cardholders, rewards cards are effectively costing them money.

Of the 1000 credit card holders surveyed by ME, 37% said that their rewards credit card offered them negative value, with the card’s costs outstripping the rewards offered.

Dollar value of reward card benefits per yearPercentage of surveyed cardholders
Negative value37%
Up to $5020%
$50-$10014%
$100-$20011%
$200-$3007%
$300-$5005%
$500+7%

According to ME, while 37% of rewards card holders surveyed said they have a credit card purely to benefit from the rewards, 36% of rewards card holders said they were unclear on the dollar value they earn from their card. Plus, 50% of rewards card holders surveyed said that they think the dollar benefits of their rewards card have changed or diminished over time since they first took out the card.

ME credit cards specialist, Christopher Mak, said that approximately one in three people not understanding what value they get from their rewards credit cards is “a worrying sign”, adding that it’s important for Australians to be real about how they plan to use their rewards cards.

“Rewards on credit cards can be appealing, but be aware that you usually pay for them in some way – either through a fee or a higher interest rate.”

“The key take away is to understand what you are up for, and if you are having trouble managing debt, you might question whether a rewards card is the right option for you.”

RateCity research director, Sally Tindall, recently said that it’s important to pick a credit card that complements your spending habits, adding that “the last thing you want is a credit card that sends you financially backwards.”

When RateCity recently crunched the numbers on some of Australia’s highest-earning frequent flyer cards, the three most important factors to keep in mind were found to be a card’s rewards, fees, and the interest rate.

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Fact Checked -

This article was reviewed by Product Director Liron Nehmadi before it was published as part of RateCity's Fact Check process.

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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.

Should I get a credit card?

Once you've compared credit card interest rates and deals and found the right card for you, the actual process of getting a credit card is quite straightforward. You can apply for a credit card online, over the phone or in person at a bank branch. 

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.