Credit Card Rewards

Reporter: Gavin Alder

Thanks to the gloomy economic picture, Australians are spending less on their credit cards and are bailing out of frequent flyer programs to get everyday rewards.

The new style credit card shuffle is a sign of the times says Steve Mickenbecker from financial research firm Canstar Cannex. "Maybe they're flying less -- I mean that seems to be the case when you look at what's happening at Qantas at the moment -- they're also saying, look I haven't got time to read catalogues and I have enough toasters, so cash is king right now", Steve said.

And the banks are rapidly responding. Canstar Cannex crunched the numbers on 188 credit cards with rewards programs. "The top five percent of rewards programs actually get the five star rating and they're outstanding value", Steve said.

The six top rated cards are...

The Westpac Altitude American Express

Woolworth's every day money rewards

Citibank's BP Mastercard

The David Jones gift points Amex

GE Money's Myer One card

The Bank of Queensland Q rewards card

All offer cash back or vouchers of some sort, but the Cannex research also shows even with the best cards, you have to spend big to reap the benefits.

A minimum annual spend of $12,000 accrues an overall benefit of $105 on the very best value cards, after the annual fees are taken into account.

For a $24,000 annual outlay you can achieve between $250 and $325 in reward bonuses -- after fees; and if you spend $60,000 the rewards range between $780 and $1,250 dollars.

When you consider a $105 return on an outlay of $12000 -- with cards that have interest rates up towards 20%, you can see the rewards amount to nothing but small change. And unless you're disciplined with your credit card, the chase for rewards could end up financially blowing up in your face. "Don't blow your budget just to earn points", Steve said.