Credit cards aren't only used to pay for big-ticket items or go on spending sprees. Some credit cards also offer rewards for your spending. If you like to get something for nothing, or fancy yourself a bargain hunter, then rewards credit cards may interest you.
Credit card rewards programs are all different, but they all let you enjoy extra benefits from using a credit card. In the right hands, a credit card with rewards can offer a lot of value.
Find and compare reward program credit cards
Product Name Card | Purchase Rate | Points Per $1 Spend | Points Earned | Rewards Available | Annual Fee | Go to site | |
|---|---|---|---|---|---|---|---|
Purchase Rate 16.99% | 0.01 capped at 30/Monthly earn 0.01 points for $1 Visa eligible purchases Points Per $1 Spend | 360 over 12 months (approx.) | Cash Back | Annual Fee $149 | More details | ||
Purchase Rate 20.24% | Up to 1 earn 1 point for $1 Visa eligible purchases Points Per $1 Spend | 12000 over 12 months (approx.) | Gift Card | Annual Fee $80 | More details | ||
Purchase Rate 16.99% | 0.002 uncapped earn 0.002 points for $1 Visa eligible transactions Points Per $1 Spend | 120 over 12 months (approx.) | Gift Card | Annual Fee $125 | More details | ||
Purchase Rate 20.24% | Up to 2 earn 2 points for $1 Visa eligible purchases Points Per $1 Spend | 60000 over 12 months (approx.) | Gift Card | Annual Fee $375 | More details | ||
Purchase Rate 21.49% | Up to 1 earn 1 point for $1 Mastercard eligible domestic transactions Points Per $1 Spend | 60000 over 12 months (approx.) | Gift Card, Cash Back | Annual Fee $0 for 12 months then $199 | More details | ||
Purchase Rate 20.24% | Up to 1.5 earn 1.5 points for $1 Visa eligible purchases Points Per $1 Spend | 24000 over 12 months (approx.) | Gift Card | Annual Fee $95 | More details |
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How do credit card reward programs work?
Rewards credit cards let you earn points for every dollar you spend. When you rack up enough points, you can exchange these points for rewards.
The rewards you can redeem will depend on your credit card provider, but may include:
- Flight rewards where you can build up points with an airline or group of airlines, and may even have your travel insurance and concierge services covered.
- Retail rewards allow you to build up points that you can redeem at particular stores. You might even get bonus points for shopping at particular retailers or buying specific products.
- Cash back rewards which refund you a small part of what you've spent.
- Supermarket rewards where using your credit card for everyday spending at a particular supermarket can earn you free extras.
What are the benefits and drawbacks of reward credit cards?
Reward programs are meant to encourage bigger spending. Simply spending for the sake of earning points can be risky. But if you use your rewards credit card responsibly, you could enjoy significant benefits.
For example, if you regularly shop at certain outlets or supermarkets, you may want to consider a rewards credit card linked to these stores. If you were going to spend the same amount of money there anyway, then a rewards credit card could also earn you free extras, provided you pay the balance off in full and on time.
Big spenders who like to flash their plastic could also benefit from a rewards credit card. In this case, you're not altering your behaviour in any way. Instead, you're simply capitalising on your regular spending by earning rewards.
Finally, frequent flyers can benefit from rewards credit cards. Maybe you frequently hop on planes for business trips, or just have the travel itch. These cards may let you use points for plane tickets and flight upgrades, and also take advantage of hotel deals.
Rewards credit cards may not be suitable for everyone. Maybe you’re on a budget and don’t always pay off your credit card in full or on time. Maybe you aren't a big traveller. Maybe you prefer to pay for your shopping through other means. In cases like these, a reward credit card may not be ideal for you. You may end up paying fees and getting into debt for a rewards program you won’t enjoy as many benefits from.
How do I carry out a rewards credit card comparison?
To start a rewards credit card comparison, look at the freebies it offers. Are you interested in these products and services? There may not be much point spending big with a rewards credit card if you're not going to make use of its bonuses.
Also, check the card’s fine print:
- How easy are the points to redeem?
- Is there a limit on how many you can earn?
- Will you be able to earn the points required?
- Do the points expire at any point?
- What is the dollar-to-point ratio?
To get a better idea of the value of credit card rewards, don't just look at how many points you earn per dollar on each card. To find the best rewards credit card for you, look at how many points you’d need to earn to redeem a particular reward on one card, then compare this to other rewards cards. The easier it is to earn the rewards you want, the more value a card may offer you.
Also, keep the fees and charges in mind. Some rewards credit cards charge high fees, which can offset the free extras in some cases. If you’d pay more in fees for a credit card than you’d earn in rewards, it may not provide enough value to be worthwhile for you.
Hopefully, once you've looked at all these factors, you’ll feel more secure finding a rewards card that suits your spending and lifestyle.
Nick Bendel
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.
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