Just re­ward still on cards for smart shop­pers

An­thony Keane un­cov­ers the re­deem­ing fea­tures of loy­alty points

The Sunday Times - - YOUR MONEY -

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.

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