Rip-off on the cards

Costly plastic promises

SHOPPERS lured into credit card rewards schemes are having to spend up to $84,000 to receive free flights or gift cards, shocking new figures found.

Financial institutions have sharpened card sweeteners, including bonus points, ahead of Christmas to try and snare splurging shoppers.

But analysis from financial services firm Mozo found Bankwest has one of the worst credit cards on the market – the More World Mastercard – which requires users to spend a minimum of $84,000 on eligible purchases within 12 months to earn a bonus 115,000 points.

The amount is almost the average Australian wage at $84,968.

Spending $84,000 on this card would get the user an equivalent of one return domestic flight from Sydney to Melbourne, or two $100 gift cards.

But Bankwest’s general manager of customer solutions and insights Paul Vivian said the card “compares favourably with similar rewards cards”.

Latest Reserve Bank of Australia figures show the amount of debt on credit cards is a massive $49.7 billion. More than $29.2 billion is accruing interest.

In recent years providers have scaled back the value of rewards points, meaning customers have to spend more to reap the benefits.

Mozo spokeswoman Kirsty Lamont said rewards cards could be “extremely tempting” but there could be a “sting in the tail” if you don’t check the terms and conditions attached.

“We have seen the value of credit card rewards decline dramatically over the last few years,” she said. “It’s really important not to just look at the introductory offer but the ongoing points earn rates and redemption rates to make sure it delivers good value over the long term.”

Financial adviser Scott Haywood said customers should assess credit card annual fees before signing up.