Reward Cards

Reporter: Helen Wellings

They're all desperate for our custom, luring us with freebies, shopping points, vouchers, bonuses and discounts. But which rewards cards give poor value and which give the best return, with the least fuss?

Flybuys Congrats your reward is here.

Del Ford wanted to redeem her FlyBuy points on this double cordless phone, but there was a mistake in the order and she somehow ended up with a single cordless model.

The FlyBuy call centre said there was no refund no exchange, he just kept repeating, no refund no exchange. You were told the terms of reference. I wasn't to my knowledge because I ordered it over the phone.

Fair Trading sorted it out but it took 8 weeks to get the double cordless 2 - 3 years of shopping to accrue the points needed for a $54 phone.

These cards have been shown to change the psychology of the shopper, people will go out of their way to find a store that has a rewards program that suits their card.

Tom Godfrey of Choice says earning rewards can be a false economy.

We compared the 4 major bank's lowest annual fee rewards cards to see how much you have to spend to get a $100 Myer or David Jones gift voucher. Westpac Altitude Visa/Mastercard has the most expensive annual fee of $100 but the cheapest spend requirement $16,950. Commonwealth Bank Awards - the annual fee's $89, the spend, $17,400. ANZ Balance Visa, $79 annual fee and you have to spend $19,980. NAB Velocity Rewards Visa has the lowest annual fee, $65, but it's the most expensive spend - $27,000. So on average you have to spend around $20,330 just to redeem a $100 shopping voucher.

It catches us in 2 ways, one is your fees, which can be up to $700 a year, outweigh the benefits that you get from it.

Taking into account the annual fee, four out of ten standard cards deliver just $20 in rewards a year. And in one out of ten cards - the annual fee puts you out of pocket. Alex Parsons of Rate City which compares financial products. "I think the second thing is, if you're not paying your credit card back in full every month, you're up for an enormous amount of interest up to 22.99% is the worst interest rate on credit cards."

So, the winners from credit card rewards programs, the big spenders, people who outlay in excess of $60,000 a year, $5,000 a month, on their credit card. The more you spend the more rewards. 

No family, no individual should bend over backwards, put themselves out trying to redeem points or swipe their card, these programs are there for large

Retailers, large supermarkets to collect a huge amount of data on individuals,

and they use that data to then market products back at you.

Flybuy programs, the value of points vary enormously depending on your shopping profile and the retailer.

"Some cards will offer you half a point for every dollar spent, other cards will offer you one point for every dollar spent, other cards will offer you 2 points for every dollar spent." Said Alex

Participating stores, Coles, BI-LO, Target, Kmart, Jetstar etc.

On the average shop of $156 a week, you save just 78 cents using Flybuy points. But the value of shopping rewards and vouchers has increased around 11% over the past year.

"If you spend $15,700 on Fly Buys, you will get a $50 rewards voucher. Now to spend that amount it's going to take the average shopper about 2 years so you can make your own mind up, does that sound like great value?" Said Tom

Rod Stowe, Commissioner for Fair Trading NSW says. "I think savvy consumers where they are able to accumulate points knowing how much they are able to receive for each purchase from individual retailers and who pay off their monthly bills in total can probably do very well out of those schemes."

Rod Stowe, Commissioner for Fair Trading NSW, says complaints about difficulty in redeeming points for flights and expiry dates are common complaints.

"Be aware too of some schemes which actually change conditions after you've entered them, and also be aware of any additional costs, entry fees, some schemes require you to actually pay part of the reward payment at the end of the redeeming period." Said Rod

People who travel a lot and stay in hotels and motels, Flybuys you would probably acquire a lot, but for the average shopper doing their weekly grocery shop buying petrol, it is a very hard slog to get any number of points.

 

For further information:

www.ratecity.com.au/credit-cards

www.infochoice.com.au/banking/credit-card.aspx