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How To Maximise Value On Your Credit Card’s No Annual Fee Offer
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How To Maximise Value On Your Credit Card’s No Annual Fee Offer

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As you compare credit cards, it’s hard not to get swayed by intro offers. As they pull you in with promises of bonus rewards points and interest savings, it becomes ever harder to remain focused on what you were looking for in a credit card in the first place.

With that in mind, we thought we’d investigate how much value you can actually get from an intro offer, while looking specifically at no annual fee offers. In answering this question, our aim is to work out whether it’s worth letting yourself be swayed by this particular type of introductory offer, by putting a dollar value on the offer’s potential for savings.

In doing this, we’ll round up all the no annual fee offers currently available on CreditCard.com.au, to look at what savings each card could potentially offer you in dollar terms. From there, we’ll get into how you could boost that total – and how to tell whether the card is worth keeping past the first year. Cancel or continue? You decide.

No Annual Fee Offers 101

What is a no annual fee offer? As the name suggests, a no annual fee offer is an introductory offer that waives the card’s standard annual fee, typically for the first year. So, as long as you avoid interest and all other fees, with this type of offer there should be no outgoing cost to use the card in the first year – and you essentially get to use your new credit card for ‘free’.

If the card is basic in nature, you can enjoy access to credit, alongside all of the card’s standard extras while paying no annual fee. However, if the card also offers perks or rewards, you can benefit from all the value those extras provide, while paying out nothing in return.

And double-up offers? Often, card providers will double-up on intro offers, providing new cardholders with access to bonus points or interest savings via purchase or balance transfer offers, on top of their no annual fee offer. This essentially creates even more value within that first year – which is what we’ll get into now.

All rates, fees and offers correct at the time of publication as of 6th September, 2021

No Annual Fee Offers on Premium Cards

Let’s start with the biggest players first. Premium cards typically offer more in perks and rewards, and as a result, tend to have higher annual fees. So, it goes without saying that if you don’t have to pay that annual fee, you should get more back in value.

      ANZ Rewards Black Card

ANZ’s top tier ANZ Rewards Black Card has a standard annual fee of $375. Taking that sizeable chunk of change out of the equation in the first year, the card’s no annual fee will allow you access to the following.

  • 180,000 bonus Reward Points (after spending $2,000 on eligible purchases in the first three months).
  • An everyday earn rate of 2 Reward Points per $1 on spending up to $5,000 per statement period, and 1 Reward Point per $1 thereafter.
  • Uncapped points earned within the ANZ Rewards program.
  • Access to seven complimentary insurances, including international travel insurance for the cardholder and the cardholder’s family on trips up to six months.

💰 Potential Value in the First Year

Time to talk value. Obviously, the value you get from any credit card depends on how you use it. With that in mind, we’ll look at the maximum value you could expect from this card, based on a $5,000 monthly spend.

  • Value of annual fee = $375
  • Value of 180,000 bonus Reward Points = $810 in gift cards or $725 in cashback
  • Value of 120,000 Reward Points earned = $540 in gift cards or $480 in cashback
  • Value of international travel insurance for 2 adults and 2 children travelling for six months = $2,022
  • Value of Rental Vehicle Excess in Australia = up to $5,000

This would give you $1,725 in value earned on rewards and annual fee savings, plus a potential value of $7,022 on costs related to insurance.

Note: For these examples, we won’t include the potential value gained from other complimentary insurance covers, such as Purchase Protection and Extended Warranty, as these are too intangible, with value based on too many unknown factors.

💡 How to Boost Value

If you want to boost the value you receive from your ANZ Rewards Black Card, you will have to channel more funds through it (being careful to always clear your balance before it starts accruing interest), and up the ante on your rewards redemptions.

In terms of maximising points value, that typically means opting for travel over gift cards and cashback. ANZ Rewards allows you to convert points to frequent flyer partners at the following rates:

  • Velocity Frequent Flyer Points 2:1
  • Cathay Pacific Asia Miles 3:1
  • Singapore Airlines KrisFlyer miles 3:1
  • Air New Zealand Airpoints Dollars 200:1

Let’s say you converted your 180,000 bonus Reward Points to the Velocity program. This would give you 90,000 Velocity Points to play with. Assuming higher value international travel redemptions will be back on the table early next year (and assuming Velocity Point redemption values are much the same as they were when international borders closed last year), you could:

  • Fly Economy from Adelaide, Brisbane, Canberra, Melbourne or Sydney to Los Angeles on a return flight for 89,600 Velocity Points.
  • Fly Economy from Brisbane, Melbourne or Sydney to Perth five times for 89,000 Velocity Points.

(Points correct as of January 2020)

And channelling more funds through your card? More additional cardholder spending would mean more points accumulating in your account. This should give you more points to play with when it comes time to choose what you want to redeem them for.

It’s worth noting that while the ANZ Rewards Black Card allows up to nine additional cardholders, they come at a cost of $65 each per year. If you choose to add an additional cardholder to boost your rewards earning, just make sure the additional points they provide are worth more than the cost of that extra annual fee.

🔎 Cancel or Continue?

You’ve had the card for almost a year, and your first annual fee is due. Do you keep the card? Or do you cancel before that annual fee is charged?

This will really depend on how much you spend on the card – and what extras you use.

If you spend $5,000 per month, you could get back $540 in gift cards or 60,000 Velocity Points. Subtracting the $375 standard annual fee from the $540 gift card redemption, you are only getting $165 in value. On the other hand, 60,000 Velocity Points could take you away somewhere nice, providing you more value should borders remain open.

If you’re travelling, you should also be able to take advantage of the card’s travel covers, which could also provide more value back on that annual fee.

      American Express Platinum Edge Card

With the American Express Platinum Edge Card, you can currently save $195 on its standard annual fee thanks to its no annual fee offer. Here’s what else you can expect when you apply.

  • 50,000 bonus Membership Rewards Points (after spending $1,500 within the first three months).
  • $200 Travel Credit every year to spend on eligible domestic and international flights, hotels, car hire or unique experiences with American Express Travel.
  • An uncapped earn rate of 3 Membership Rewards points per $1 spent at major supermarkets and petrol stations, 2 Membership Rewards Points per $1 spent on purchases in a foreign currency when overseas and online, and 1 Membership Rewards Point per $1 spent on all other purchases.
  • You can also earn an additional 3 points per $1 (up to 40,000 points) on top of the standard earn rate via the American Express Shop Small offer (until 31 March 2022).
  • Access to four complimentary insurance covers, including travel insurance for the primary cardholder on trips up to 180 days, plus purchase protections.
  • Savings on smartphone screen repairs up to $500 with Smartphone Screen Insurance.

💰 Potential Value in the First Year

As this is another premium card, let’s assume a similar spend of $5,000 per month, made up of $2,000 spent at supermarkets and petrol stations, $1,000 spent at international online retailers, and $2,000 spent elsewhere. An additional $500 per month is spent at small businesses over the next seven months of the Shop Small promotional period.

  • Value of annual fee = $195
  • Value of Travel Credit = $200
  • Value of bonus 50,000 Membership Rewards Points = $250 in gift cards, cashback, purchases at David Jones or Ticketmaster, or travel bookings
  • Value of 120,000 Membership Reward Points earned = $600
  • Value of 10,500 Membership Reward Points earned via Shop Small = $50
  • Value of international travel insurance for primary cardholder travelling for six months = $1,065
  • Value of smartphone screen repair = up to $500

In terms of value gained from annual fee savings and rewards, this comes to a total of $1,295. An additional $1,565 value from the use of insurance covers is also on offer.

💡 How to Boost Value

Again, because the American Express Platinum Edge Card is a rewards card, the easiest way to boost its potential for value is to increase the amount of spending you do on the card. One way to do this could involve adding additional cardholders to the account. With the Platinum Edge, you can add up to four additional cardholders at no extra cost, which could really boost your earnings.

🔎 Cancel or Continue?

How much value would the Platinum Edge offer in the second year? Assuming everyday spending remained the same, the card would offer $600 in earned rewards, minus $195 in annual fees.

This would give you $405 value in rewards, plus you’d have $200 Travel Credit to put towards travel. As long as you were making use of the card’s included insurances, this could create even more value in the card.

Purchase & Balance Transfer Offers

      Bankwest Breeze Cards

Bankwest is currently offering its Bankwest Breeze Mastercard and Bankwest Breeze Platinum Card for no annual fee for the first year. As non-rewards earning cards, their extras tend towards the basic, especially on the classic Breeze card.

Highlights include up to 55 days interest free on purchases, up to three additional cardholders at no extra cost, and compatibility with Apple Pay, Samsung Pay, Google Pay and Bankwest’s payment ring, Halo. Bankwest no longer offers their Bankwest Halo payment rings to new customers effective 28 September 2021.

Stepping it up on the Breeze Platinum, this card provides a few platinum perks in the form of complimentary overseas travel insurance, interstate flight inconvenience insurance, and 90 day purchase security insurance. Cardholders can also save with no foreign transaction fees.

But that’s not all. What makes these Breeze cards really appealing are their 0% intro offers. If you apply for either the classic or the platinum Breeze card, you can benefit from 0% p.a. on balance transfers and purchases for 15 months.

💰 Potential Value in the First Year

How much value could these cards offer in the first year? While both cards may have much lower annual fees, fewer perks, and no rewards program, they could provide incredible value with their 0% intro offers.

  • Value of annual fee
    Breeze: $49
    Breeze Platinum: $69

Scenario 1: You use the card to make a $10,000 purchase, which you repay over a period of 12 months.

  • Value of interest savings (when compared to card’s standard purchase rate) = $441

Scenario 2: You transfer $10,000 from a card with a standard purchase rate of 20%. You pay off the transferred balance over a period of 12 months.

  • Value of interest savings = $887 (or $1,191 over a period of 15 months).
  • Value of international travel insurance for 2 adults and 2 children travelling for 31 days = $355 (Platinum only)

💡 How to Boost Value

With no rewards and limited extras on offer, the main way you could boost value on these Breeze cards is by taking full advantage of their 0% offers. In saying that, you should only spend or transfer as much as you know you can pay back within the intro period, regardless of how appealing that 0% interest tag is.

🔎 Cancel or Continue?

One thing we haven’t mentioned yet is the low ongoing purchase rate applied to both the Bankwest Breeze Mastercard and the Bankwest Breeze Platinum Mastercard. Currently standing at 9.90% p.a., this is a lovely low rate for a big(ish) bank, which could make it a valuable choice for cardholders who occasionally carry a balance.

On top of that, both cards have relatively low annual fees ongoing, so as long as you feel you’re getting more back from the card than you’re paying in fees, they could be worth keeping. The platinum card in particular offers some nice perks at low cost, especially if you have overseas travel on the agenda.

Purchase Offers

      ANZ Platinum Card

Alongside its no annual fee offer, the ANZ Platinum Card is currently providing new cardholders with 0% p.a. on purchases for 17 months. Aside from the basics, the card also offers access to seven complimentary insurance covers.

These include international travel insurance for the primary cardholder and the cardholder’s family on trips up to six months, rental vehicle excess insurance (in Australia), interstate flight inconvenience insurance, and purchase covers.

💰 Potential Value in the First Year

As another non-rewards earner, the big drawcard in terms of value on this card is its 0% purchase offer.

  • Value of annual fee = $87

Scenario 1: You purchase an item for $10,000 on your card and pay it off over 12 months.

  • Value of interest savings (when compared to card’s standard purchase rate) = $899

Scenario 2: You purchase an item for $10,000 on your card, but pay it off over 17 months.

  • Value of interest savings: $931 in the first 12 months, or $1,318 over 17 months.
  • Value of international travel insurance for 2 adults and 2 children travelling for six months = $2,022
  • Value of Rental Vehicle Excess in Australia = up to $5,000

💡 How to Boost Value

Want to get more from this card? You could channel more spending through the card in the first 17 months to take advantage of further interest savings. Obviously this comes with the caveat that you must be able to repay that increased spend within the intro period, or you’ll be hit with the card’s much higher standard purchase rate of 20.24% p.a. when the intro period ends.

To maximise value, you could also make better use of the insurance covers provided, by paying particular attention to the card’s purchase protections. These are often overlooked by cardholders, but can provide a treasure trove in terms of value – as long as you’re willing to sift through the small print.

🔎 Cancel or Continue?

Should you keep the card past the first year? If you’re still making use of the 0% purchase offer, then this one’s a no-brainer. It’s also worth noting that you can avoid paying the card’s annual fee by channelling at least $20,000 through it each year. You can also add up to nine additional cardholders at no extra cost, which could also work to boost its value.

What may cause you concern, however, is the card’s standard ongoing purchase rate. At 20.24% p.a., this is not a card you want to carry a balance on, no matter how much you make use of its complimentary insurance covers.

Balance Transfer Offers

Moving on to cards that combine no annual fee offers with balance transfer offers. These cards can be a great find, as they not only allow you to save on annual fees, they can also help you save big on interest when you transfer a balance. There are some super long balance transfer offers out there right now, so let’s dive in.

      NAB Low Rate Card

The NAB Low Rate Card currently has no annual fee for the first year (usually $59), with 0% p.a. on balance transfers for a whopping 32 months. That gives cardholders almost three years to pay down their transferred balance, as they pay zip in interest and no balance transfer fee.

While the card does offer a relatively low 12.99% p.a. purchase rate, unpaid balance transfers will revert to the card’s cash advance rate, which is currently 21.74% p.a. Also on offer is full mobile wallet compatibility, up to 55 days interest free on purchases (these do not apply when there is a balance transfer), and one free additional cardholder.

      ANZ Low Rate Card

With no annual fee in the first year, the ANZ Low Rate Card offers savings of $58 on the standard annual fee, alongside 0% p.a. on balance transfers for 30 months. Similarly, this card offers a low ongoing purchase rate of 12.49% p.a. and no balance transfer fee, with any unpaid balance transfers reverting to the card’s cash advance rate at 20.24% p.a.

In terms of extras, the card provides digital wallet compatibility with Apple Pay, Google Pay, Samsung Pay, Fitbit Pay, and Garmin Pay, worldwide emergency credit card replacement, and up to three additional cardholders at no extra cost. Up to 55 days interest free on purchases is in play when there are no balance transfers on the account.

      St.George Vertigo Card

As they all operate under the Westpac Group umbrella, the St.George Vertigo Card, Bank of Melbourne Vertigo Card and BankSA Vertigo Card all work in the same way. With no annual fee in the first year (typically $55), these cards are also currently offering 0% p.a. on balance transfers for 30 months with no balance transfer fee.

Each card has a relatively low ongoing purchase rate of 13.99% p.a., but again, unpaid balance transfers revert to the card’s cash advance rate of 21.49% p.a. And extras? These cards provide up to 55 days interest free on purchases (not applicable when there are unpaid balance transfers), one free additional cardholder, and compatibility with Apple Pay, Google Pay and Samsung Pay.

      Great Southern Bank Low Rate Card

Formerly known as CUA, the Great Southern Bank is offering its Great Southern Bank Low Rate Card for no annual fee in the first year (usually $49), and 0% p.a. on balance transfers for 25 months with no balance transfer fee.

As another low rate card, it provides a low ongoing purchase rate of 11.99% p.a., and up to 55 days interest free on purchases when there is no balance transfer on the account. Unfortunately, unpaid balance transfers again revert to the card’s cash advance rate at 21.74% p.a. Extras include up to nine free additional cardholders, and compatibility with Apple Pay and Google Pay.

💰 Potential Value in the First Year

The value you get from balance transfer cards such as these can be enormous, but overall, it will really depend on how much of a balance you want to transfer, what interest rate was being applied on your balance previously, and how quickly you pay it all down.

  • Value of annual fee
    NAB Low Rate Card: $59
    ANZ Low Rate Card: $58
    St.George/Bank of Melbourne/BankSA Vertigo Card: $55
    Great Southern Bank Low Rate Card: $49

Scenario 1: You transfer $10,000 from a card with a standard rate of 20% p.a. and pay it off in 12 months.

  • Value of interest savings = $899

Scenario 2. You transfer $20,000 from a card with a standard rate of 20% p.a. and pay it off over the card’s intro period.

  • Value of interest savings
    NAB Low Rate Card: $5,523 over 32 months
    ANZ Low Rate Card: $5,060 over 30 months
    St.George/Bank of Melbourne/BankSA Vertigo Card: $5,060 over 30 months
    Great Southern Bank Low Rate Card: $4,036 over 25 months

💡 How to Boost Value

Can you boost the value offered on these cards? Not really. You will likely transfer as much as you need to transfer, which will give you access to the card’s interest free savings. What will make the card more valuable, however, would be to clear your transferred balance within the intro period to avoid that cash advance revert rate.

It would also be worthwhile considering whether spending on the card is a good idea while there is a balance transfer still to pay down. With a balance transfer on the card, the interest free period on new card spending will not apply. So not only would you have to work harder to pay off new spending on top of your transferred balance, you will also have to cover interest costs on any new purchases you make.

🔎 Cancel or Continue?

Each of the balance transfer offers we’ve looked at in this section have a generous intro period. That means, unless you have paid off your transferred balance within the first year, you will likely choose to keep the card until the balance is cleared. It is nice to see each card has a relatively low ongoing annual fee, and once the balance transfer is paid off, a low ongoing purchase rate kicks in.

Cashback Offers

What could be better than paying no annual fee? Getting cashback on your spending while paying no annual fee, perhaps? Well, as that’s exactly what these cards offer, let’s take a look.

      Westpac Low Rate Card

Charging no annual fee in the first year, the Westpac Low Rate Card offers a saving of $69 on its standard annual fee, while also providing new cardholders access to up to $400 in cashback and 6.99% p.a. on balance transfers for 12 months.

To take advantage of the cashback offer, you will need to spend $4,000 within four months from card approval. Once you meet that minimum spend, the $400 will be credited to your card’s balance. As for the balance transfer offer, that provides a rate of 6.99% p.a. on balance transfers for 12 months with no balance transfer fee, reverting to the cash advance rate of 21.49% p.a.

      St.George Vertigo Card

Again, the St.George Vertigo Card operates in the same way as the Bank of Melbourne Vertigo Card and BankSA Vertigo Card, each of which waive their annual fee for the first year (usually $55), while providing $300 cashback on a minimum spend of $4,000 in the first four months.

Like the Westpac card, these cards also provide 6.99% p.a. on balance transfers for 12 months with no balance transfer fee, reverting to the card’s cash advance rate at 21.49% p.a.

💰 Potential Value in the First Year

As both Westpac’s Low Rate Card and the Vertigo cards are basic in nature, the value you get from these cards will be focused on annual fee savings and cashback. While there could be savings to be found within the balance transfer offer, if you’re serious about doing a balance transfer, you’d be better off choosing a card with a 0% balance transfer offer instead.

  • Value of annual fee
    Westpac Low Rate Card: $69
    St.George/Bank of Melbourne/BankSA Vertigo Card: $55

  • Value of interest savings
    Westpac Low Rate Card: $400
    St.George/Bank of Melbourne/BankSA Vertigo Card: $300

💡 How to Boost Value

Again, with no rewards and few extras on offer, there’s not much you can do to boost value on these cards. It is worth pointing out that if you want to get the most out of the cashback offer, you should make sure you can afford to spend $4,000 within the first four months, to then repay that spending before it attracts interest.

🔎 Cancel or Continue?

Whether you choose to keep these cards will really depend on how useful they are to you. If you tend to carry a balance, you may find their relatively low purchase rates help to save you in interest. On the other hand, you may find lower rates on cards with lower ongoing annual fees, which could save you even more.
 

Photo source: Getty Images
Founder - Roland B Bleyer

Roland Bleyer

Founder of Creditcard.com.au. Roland has extensive knowledge about credit cards in Australia. Known as a credit card expert, he has been featured on tv and in various publications. Some popular offers on our site right now include the ANZ Low Rate. This special offer has no annual fee first year, a low purchase rate and long 0% balance transfer. Have a look also at the huge 0% for 30 months balance transfer from Citi with no balance transfer fees.

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