One in three Aussies losing money on rewards credit cards



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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 year Percentage of surveyed cardholders
Negative value 37%
Up to $50 20%
$50-$100 14%
$100-$200 11%
$200-$300 7%
$300-$500 5%
$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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