Just reward still on cards for smart shoppers
Anthony Keane uncovers the redeeming features of loyalty points
REWARD programs are being tinkered with again, but millions of Aussies are still using them to get something for nothing.
A decision by American Express to shave the value of points earned in its popular card programs is the latest hit on consumers. And while Amex cards remain more generous than bank offerings, it’s important to maximise points potential wherever possible.
Researchers say using creditcard reward points for free flights delivers twice as much value as for gift cards or other retail items.
Daniel Sciberras, of independent platform pointhacks. com.au, said many people believed they needed to spend lots to earn free flights.
“People are missing out on earning points simply because they forget, or are not aware of the point-earning tools and avenues at their disposal,” he said.
Strategies include taking advantage of bonus offers, keeping frequent-flyer accounts active and maximising airline project partnerships, he said.
Research by comparison website finder.com.au has found that 5.6 million Australians, or about 44 per cent of credit-card holders, plan to earn points from Christmas shopping.
Spokeswoman Bessie Hassan said card providers were rolling out sweeteners, such as bonus points and fee waivers, but consumers should remember that reward cards had higher fees and interest rates.
The research found 17 per cent of consumers had rewards credit cards, but did not plan to use them.
“If you use credit cards to cover the cost of Christmas purchases, and clear your credit card balance in full every month, it could make sense to use a reward card,” Ms Hassan said, adding that if the debt was not repaid in full each month, interest costs outweighed the benefits of points collected.
Separate mozo.com.au data shows the average net value of an American Express rewards card will drop 27 per cent when the changes happen next April.
Amex cardholders will have to spend at least $7017 to earn a free one-way flight between Aussie capitals, or $13,264 for a $100 gift card.
American Express said increased regulation had “changed the economics of the payments ecosystem across Australia” and had prompted it to drop its maximum frequent flyer points earning potential from 1.5 to 1.25 points for each dollar spent. The company’s Will Thorne said other Amex features, such as uncapped points earning, travel credits, airport lounge passes and insurance, were not changing.