Travel rewards credit cards allow you to earn points towards flights and holidays as you spend – but choose the wrong one and you may find the experience far from rewarding. We sized up the major card loyalty programs and found:
In this podcast, Brendan Mays tells you how to get the best value out of rewards cards while avoiding the pitfalls, or you can check out our Rewards Credit Card Guide.
Getting the best value
CHOICE looked at 40 credit card programs (63 cards in total) offering travel rewards or partnered to an airline’s frequent traveller program, and then calculated rewards based on three monthly spend levels: $1000, $2500 and $5000. There are all sorts of goodies on offer – from local and international travel to vouchers and accommodation – but not all cards will deliver for all users.
For those spending around $1000 a month, your card can actually cost more in annual fees than you’ll earn in rewards, but don’t despair – there are decent value options even for low spenders with the new Virgin Flyer and Jetstar cards. If you regularly rack up around $2500 per month, the rewards potential increases, but you still need to choose carefully to earn enough rewards to make it worth your while.
High spenders stand to gain the most, as long as you don’t mind spending with Amex instead of Visa or MasterCard. However, if you can’t pay your balance in full each month, our advice is to forget about rewards cards altogether and opt for a no-frills, low-interest credit card instead. If you want to know more about the basics of rewards credit cards, and best ways to gain the most value for them, check out our rewards credit card guide.
While Qantas Frequent Flyer and Velocity lead the way, some alternative airline reward schemes have broken into the mainstream market. The Kris Flyer program of Singapore Airlines (voted number one airline in our 2010 international airline satisfaction survey) is the most prominent and featured on 14 of the 40 programs surveyed, including two dedicated Singapore Airlines cards from Westpac. The Citibank Emirates platinum card, which links you directly with the airline’s Skywards program, is another noteworthy addition.
While the cards may be appealing for Emirates and Singapore Air faithfuls, neither program offers much in the way of vouchers and both Kris and Skywards points expire within three years, which will challenge those with a lower spend limit.