$360 million points trap Aussies keep falling into
I AM 100 PER CENT ADDICTED to frequent flyer points. I check daily to see if there are any new bonus offers that can pitch some extra points into my accounts.
Extra Woolworths Rewards points on a Netflix card? I’m there. Another 2000 flybuys for spending $50 at Coles? I know where I’m doing my supermarket shopping this week. How about 1000 points just for signing up to a chemist’s online shop? Count me in.
I regularly log into all my airline accounts to make sure I’ve been assigned all the points I’m entitled to. And when I’m planning a trip, using airlines that can earn me points and get me perks like lounge access is always high on the list of priorities.
But there’s one thing I definitely don’t do. I don’t buy anything purely so I can earn points from that purchase. If you start following that approach, you’ll often end up spending more to acquire points than they’re worth.
While this might seem like obvious advice, it’s a common mistake. Research by Finder suggests that more than half a million Australians have made purchases simply to earn points. And we’re not just talking one packet of cheese here.
The average amount wasted by those points hounds was $624. Collectively, that adds up to $364 million of wasted money each year. I’m determined not to end up in that group. There are plenty of more interesting ways to spend $624. So I don’t go for retailer offers like “earn five times more points on clothes when you spend $30 or more”.
In that case, if I spent $30, instead of earning 30 points as usual, I’d earn 150 points.
Once I convert those to actual frequent flyer points and redeem them, they’ll be worth about $1.50 (assuming I use them wisely). The pay-off isn’t there. Why spend $30 on a piece of clothing I don’t need just to get $1.50 worth of free travel?
If I was dumb enough to use the points for something other than a flight, I might not even make the value back.
The same applies to paying with a credit card, especially when there’s a surcharge for using it, purely to earn the points. Most cards won’t deliver enough value to make that worthwhile.
The key is to only take up points offers that reflect spending you’re actually going to do.
I have to eat, so I may as well earn extra points while I’m at the supermarket.
I’m already paying for Netflix, so I’ll happily take bonus points to do so. And I book lots of travel for work and play, so I’ll try and take advantage of sales that offer extra points or bonus status credits.
But I’m not going to stock up on something I don’t need to reach my points goals. It’s a waste of my time and my money.