In a recent survey, only 6% of Australians said they bothered to
check out a credit card comparison site before making a credit card
application and around 50% only applied to their own bank.
When researching a rewards credit card, it is vital that you shop
around to find the best everyday money credit card for you. Here are
our top five factors to take into account when choosing a credit
card rewards program.
1. How many points you earn with Visa and MasterCard?
Every single credit card rewards program in Australia works
differently. The amount of points that you earn varies significantly
from provider to provider. Some award one point per dollar spent,
whilst others offer enhanced points collection for using a certain
type of credit card.
Don't be fooled into thinking that the higher the points offered per
dollar spent, the better the scheme. If you were offered two points
per dollar spent, but you had to redeem three times as many points
for the same reward, you'd actually be worse off through this
scheme.
Compare the points earning potential to the number of points
required for a certain reward. For example, see how many points you
would need for a $50 shopping gift card, and work out what you would
have to spend on the card to earn these points.
2. The annual fee?
Most rewards credit cards charge an annual fee of between $25 and
over $200. A card with a low fee might seem preferable, but it may
offer less points per dollar spent. The more generous schemes may
have higher annual fees. Make sure you take any annual fee into
account before choosing a credit card rewards program.
3. Would a Visa or MasterCard Gold or Platinum card be better?
There are many gold and platinum cards affiliated to credit card
rewards schemes. Often, you earn more points per dollar spent by
using a gold or platinum card. However, the annual fees for these
cards are generally higher.
If you use your card on a regular basis, you may find it is
beneficial for you to pay a higher annual fee in order to benefit
from an enhanced number of credit card rewards for your spending.
You will also benefit from many other advantages with a gold or
platinum card including enhanced service and free insurances.
4. How to earn bonus points?
Many credit card rewards programs offer bonus points to customers.
This may be in the form of an initial points credit the first time
you use your card, or by offering a range of 'bonus partners';
businesses through whom you can earn additional points.
Research how you go about earning bonus points. If a card provider
offers additional points through a company that you use often, this
could help you accumulate credit card rewards more quickly.
5. What are the choices of reward everyday money credit cards?
Every credit card rewards program offers a different range of
rewards. These range from flights, gifts, homewares, electrical
equipment and experiences. Before you choose a rewards card, head
online and research the range of options available through a
particular credit card rewards program. Choose the everyday money
credit card with the rewards that suit you. ~ Jack Smiths
