Rewards Credit Cards

Updated 3 August 2020

Rewarding you for your credit card spending, rewards cards earn points that can be redeemed for anything from gift cards for your favourite retailers to flights to exotic locales.

Designed to offer cardholders something back on their card spending, rewards cards earn points on purchases, which can then be redeemed within a rewards program. Rewards programs can vary hugely. Some reward frequent flyers, while others reward supermarket shoppers. The key is to find the card and the program that rewards you for the spending you do most.

Which is where CreditCard.com.au comes in. Using our visual comparison tool, finding the right card becomes quick and easy. Check out the circles (or bars, if you’re on a mobile device) to see exactly how well the card rates on its most important features. On rewards cards, that is earn rate, bonus points and annual fee.

These features are especially important because they allow you to figure out how well each rewards card will work for you. Its earn rate will allow you to calculate how many points you will earn on your spending, while the annual fee tells you how much you’ll pay out to keep the card. In terms of bonus points, these are awesome for giving you a boost – and giving you extra value on the card.

To find out even more about the cards you are interested in, simply click or tap. Each card page is packed with essential info such as purchase rates and features. You can also check out what we think of the card in our review at the bottom of the page. When comparing cards, details matter, which is why we help you get to the bottom of all that need-to-know info.

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Rewards Credit Cards 101

What is a rewards card exactly? Rewards credit cards are designed to reward cardholders by allowing them to earn points on their card spending. Those points can then be redeemed within the card’s rewards program, on anything from flights and accommodation, to merchandise and gift cards. Easy right?

While rewards cards can certainly be rewarding, you need to understand how they work if you want to make them work for you. That’s why in this guide, we’re going to help you get to the bottom of what rewards cards can offer, looking at how they work, how to maximise your points earning, and best of all, how to make the most of the rewards on offer.

Is a rewards card right for you?

Before we get any further, you need to work out whether a rewards card is the right choice for you. Different cards suit different cardholders, and it’s safe to say rewards cards are not for everyone. Let’s break it down.

Income: Your income is pretty important. Not only will you need to meet minimum income requirements to be approved, you will also need a certain amount of spending power to allow you to earn enough points to make your card worth having.

Spending Power: Earning points means spending on your card. If you don’t have the funds to spend on your card and pay it all off each month, it will make it hard to earn enough points to make your card worthwhile.

Repayment Habits: If you carry a balance each month, a rewards card is not for you. To get value from your rewards card you need to clear your balance by the due date each month to avoid paying interest. Unless you can change your habits, a low rate card would be a better fit.

Spending Habits: By thinking about where you spend the most on your credit card, you can choose the card that best rewards that spending. Think supermarket shopping, travel spending and more.

How do you choose the best rewards card for you?

Rewards cards come in all shapes and sizes, which means they can suit different types of cardholder. Fortunately, CreditCard.com.au makes it easy to compare the options side-by-side. But, what should you look for when you compare?

Annual Fees

This is a big one. How much you pay in annual fees will directly affect the value of the points you earn. So, how do you weigh up the options?

Step 1. Estimate how much you will spend on the card each year.
Step 2. Work out what that spend equates to in points.
Step 3. Take a look at the rewards program to figure out what you would redeem your points on.
Step 4. Calculate the dollar value of that points redemption.
Step 5. Compare that dollar value to the card’s annual fee.

Interest

In all fairness, while we say you should always check the card’s purchase rate when comparing credit cards, it shouldn’t be of too much interest to you as a cardholder. Why? If you want a rewards card, you should avoid paying out interest by clearing your balance each month. If you don’t do this, a rewards card will not work for you.

Earn Rate

A card’s earn rate will tell you how many points you’ll earn for each dollar you spend. You may have the same earn rate for all spending, or it may be tiered, like this:

  • Earn 3 points per $1 on supermarket spending.
  • Earn 2 points per $1 on petrol.
  • Earn 1 point per $1 on all other transactions except government spending.
  • Earn 0.5 points per $1 on government spending.

It’s a good idea to check the small print regarding the card’s earn rate, as there may be exceptions on what spending earns points and what doesn’t.

Points Shaping

Some cards shape points. This means the earn rate drops after you spend a certain amount on the card. So, while you may earn 2 points per $1 up to a spend of $10,000 per month, you will only earn 1 point per $1 for any spending over that amount. If you know you will spend more than that amount, points shaping could seriously reduce the value of your potential earn.

Points Caps

Similar to points shaping, points caps place a cap on the number of points earned per month or per year. That means, if you spend over a certain amount, you stop earning points on your spending, which again reduces the value of your potential points earn.

Rewards

When comparing rewards cards, don’t forget to look at the rewards on offer. Choosing a card that earns heaps of points but doesn’t allow you to redeem them for anything you actually want is best avoided. Consider the rewards the program provides, taking into account the value of rewards on offer with regards to the number of points you have to redeem to enjoy them.

Features

While some rewards cards are pretty basic, others offer the world in features. You may find extras such as these help to provide more value, but it’s a good idea to weigh up the extra cost of those features in terms of annual fees, and whether you will actually make use of them.

If you want to focus solely on rewards, choose a card that allows you to do that. If you want more features and extras, compare what’s on offer and make sure your points earn still offers value.

Rewards cards carry a higher annual fee than other card types because the annual fee subsidises the different features that they come with. By using a rewards credit card the idea is the benefits you receive will outweigh the cost of the card as these services and offers would be more expensive if you paid for them separately.

We can’t say which rewards credit card will be best for any particular person or situation, and we do not give financial advice. We do, however, display a range of options on our rewards card table for you to consider and compare based on your own needs and spending habits.

There is no specific amount, and different rewards cards have different minimum income requirements. Some, such as the ANZ Rewards card, require $15,000 per year as your minimum income; some may require as much as $100,000. Where minimum income requirements are available and we have access to the relevant information it is displayed on each card’s feature page.

Yes, there is a range of options from the banks; some offer a linked airline account and others their own rewards program. There are also store credit card options, such as Coles, Woolworths or David Jones credit card. With these different types of reward cards, the points earning ratio will likely be different, so you should check this closely on each reward program when comparing.

There are a couple of reasons for this.

1) With two different card options, there is more chance purchases can earn points, because where American Express cards are not accepted Mastercard or Visa can often be used.
2) Apart from the ability to use either credit card more often, American Express often offers the chance to earn more points by using that card.

Yes, some rewards cards come with a balance transfer option. Where there is one available, and we have the relevant information, the balance transfer column of our table will display the promotional balance transfer rate and the features page will include information on the terms of the offer.

For those interested please see here for more specific information on balance transfer credit cards.

Rewards come in a number of forms:

  • Gift vouchers or merchandise – often similar to a department store range – i.e. cosmetics, homewares, kitchen wares, outdoor and sports equipment, electronic goods, gift packages, hampers and more.
  • Cash back offers on purchases
  • Entertainment – live event tickets, movie or theatre tickets or sporting event tickets
  • Travel rewards – such as free flights, points towards air travel, hotel booking, accommodation, rental car services).

Some programs have more than 3000 options to redeem points, so there will almost always be a lot to choose from.

Some credit card reward programs allow you to support a charity via giving up some of the annual fee or points, or to use your points to offset carbon emissions.

If you are interested in airline miles or travel, you could also consider whether a frequent flyer credit card is a better fit for your spending and needs.

A bank’s own rewards program will generally give members access to a selection of its own partner retailers, and will have its own separate points system. For example you may earn two different amounts of points spending the same amount of money with an airline branded frequent flyer campaign versus a bank own branded card. For example 100 St George Amplify points is not the same as 100 Qantas Frequent Flyer points. The bank’s own rewards program may sometimes have higher points value per $1 spent, but the partners may be different. It is worth considering where you spend your money and how you would use your points before deciding which type of rewards program to choose. For more on this, see ‘how do I use a rewards card’ and ‘what sorts of benefits can I get with a rewards card’.

There are different types of rewards card designed to suit different types of credit card users – often aimed at the amount of money the customer is likely to spend on the card each year. There are often different tiers of rewards cards, which have more perks as the tiers go up. Many of the banks will offer up to three levels of rewards cards. Standard, platinum, diamond or premium cards are all examples of rewards card tiers. Distinguishing between standard and platinum can be hard, but diamond or premium cards are widely considered the most exclusive.

Some credit cards are also labelled by the bank’s own rewards program, for example Westpac Altitude, or St George Amplify, or CBA Awards. These can fit into any tier depending on the individual card features.

Standard Cards

A standard rewards credit card will typically feature rewards points, however the points per $1 spent earning power may not be as high as for a platinum or diamond card, or may not apply as widely.

Standard rewards cards may also have limited options including travel insurance or purchase protection. In some cases, you can have the option to purchase additional insurances or features such as repayment protection, for an extra fee. The card’s terms and conditions will usually explain this, or you can ask the bank if you already have a rewards card.

Platinum Cards

Platinum credit cards often feature the same types of rewards points as gold cards; however the earning potential per $1 spent may be higher or at least higher with partner retailers compared to standard cards.

Platinum cards can also have features such as global customer service, lower international fees or certain fees waived or further travel insurance cover such as transit accident or flight inconvenience. Generally, these types of cards may include special platinum cardholder offers, or access to tickets or events before others. Many platinum cards also have a higher credit limit than standard cards.

Diamond or ‘Super Premium’ credit cards

The Diamond or ‘super-premium’ credit card is the highest tier of rewards credit cards. These often come with exclusive, executive style perks, outstanding concierge services and special access; however they will also have the highest annual fee and a much higher minimum income requirement than the cards in the lower tiers.

How much you travel, whether you have easy access to rewards partner outlets, how much you spend on your credit card in general and whether you are interested in features such as travel insurance and concierge services can also have an impact.

With so many choices when it comes to redeeming points, it can be hard to work out whether the reward you are thinking of redeeming holds real value. Something worth $50 in the store can be redeemed for a different amount of points depending which rewards program it is with.

There is a neat trick you can do, though, to find out the currency of points to redeem rewards when you know the recommended retail price. The formula can also be applied to different rewards in different points programs. Simply divide the number of points required to redeem the reward by the recommended retail price. This gives you the right idea of points required to redeem $1.

So, for example, to compare a reward’s dollar value, you can look at the number of points required to claim it, and then the standard purchase value of it. If a gift worth 3500 points costs $25 in-store you would divide the number of points required by that value:

3500/$25
=140 points per 1$

You can do this calculation for points in a different reward program when you know the number of points needed to redeem the same reward and the price.

In the example above, 140 per $1 is the real value of the reward, and can give you an indication of whether it makes sense to use points to claim it.

You use a rewards credit card in the same way you would use any other type of card when it comes to making purchases. Choosing when and how often to use your card can make a difference to how many rewards points you end up earning, and how quickly you can redeem points. For more information on this, see ‘what types of rewards cards are there’?

Some rewards programs will advertise ways to earn points by paying regular expenses using your card. This usually involves a direct debit coming out of the credit card account to pay monthly bills.

Other ways people use rewards cards include paying for groceries, petrol and everyday expenses using the card (some even have their rent come out to classify as a direct debit). People who do this are always disciplined and pay off the full balance of the card each month, however. Leaving an unpaid balance on a rewards credit card can mean that some or all of the value in holding the card is wiped out when purchases attract an interest charge.

Some people decide that they only want to earn points towards air miles with their credit card, so they choose a Frequent Flyer card with airline points and sometimes other travel related perks as a package.

You should consider how much you are likely to spend on a card per year, and the points value per $1 spent, as defined in ‘How do I work out what rewards points are worth, and whether individual rewards are worth it?’ when comparing rewards credit cards and thinking about how you are likely to use one. The annual fee on some of these cards may mean that some cardholders don’t get enough value versus the cost of their card.

Not necessarily, however a range of credit cards with rewards programs will let you earn points for paying BPay bills using that card. This is something you need to check in the credit card terms and conditions for the card you have.

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33 questions (showing the latest 10 Q&As)

BEN

BEN

9 July 2020
I need to compare 2 cards but the favourite toll keeps saying no cards selected when I click on it
    Roland B Bleyer - CreditCard.com.au Founder

    Roland

    9 July 2020
    Hi Ben, thanks for reaching out. Yes we have had some problems if you are incognito or private browser mode. Just not being able to add. What cards are you looking to compare? How much a month do you think you will spend on average?
Rob

Rob

6 February 2020
I'm looking for a no frills cashback reward credit card, offering at least 1% cashback, low annual fee, preferably unlimited cashback. but will consider capped if it's a decent level. I had such a card, $45 pa fee, until my credit union restructured and replaced it with a low interest card instead. I pay the outstanding amount every month so interest rate is largely immaterial. I'm on the hunt for a replacement. I am finding it hard to cut through all the fluff on card finder sites to find the simple financial facility I am after. Thanks in advance.
    Roland B Bleyer - CreditCard.com.au Founder

    Roland

    7 February 2020
    Hi Rob, very few cards deliver cash back. Many are offering a once off cash back but its not the same. Have a look at the ING Orange One Platinum. The cap is a low $30 a month though. Not sure how much you spend a month and whether this could be a good replacement.
GMA

GMA

29 August 2019
Hi I currently have 2 credit cards neither of which provide any rewards. I am now traveling overseas 2-3 times per year as well as interstate a couple of time a year. Ian a self funded retiree and have no debts oand pay my credit card off each month . I have a regular income of approx 36000 from superannuation and a further $20000 from investments yet have just been rejected for a virgin card. Can you recommend who and which card I may be eligible for?
    Roland B Bleyer - CreditCard.com.au Founder

    Roland

    30 August 2019
    Hi GMA, Virgin is issued through Citi. Citi have been tight of approvals lately. 2 cards I think of. The HSBC Platinum Qantas with a great earn rate and both domestic and international insurance. Then check out the ANZ Rewards Travel Adventure. This is a great card for travelers with no foreign fees. Saving you 3% on purchases in a different currency. Plus has some decent bonus points and points earning. Can cash advance in debit overseas with no fees as well. ANZ are a good bank that should be able to see your situation clearly. Before applying I would look to cancel at least one of your other cards. They max these cards out now. Then see if you can pay off in 3 years. Depending on your limits, this can be a real downer on your application.
David

David

16 July 2019
Hey Roland, I'm looking at rewards credit cards, to redeem points for flights.. But there is SO MANY, where do i start, my man ? The different programs, with different values for points is confusing . Please help.. I'd like a lowish annual fee, under $200, or there abouts. A no interest period and big bonus points would be awesome ! thank you for your time Ro bro. Cheers, David
    Roland B Bleyer - CreditCard.com.au Founder

    Roland

    17 July 2019
    Hi David, its going to depend on what airline program you like to fly. Qantas or Virgin are the 2 main choices. Depending on which one or network you want to use. Then this will guide your choice. For bonus points and annual fee in the Velocity earning. I like the Virgin Flyer bonus points offer. The ANZ Frequent Flyer black offer with 100k Qantas points and $200 rebate. Brings the 1st year annual fee back to $225. This would be the best bonus v annual fee offer. Go to our frequent flyer section. You can filter by rewards program. https://www.creditcard.com.au/frequent-flyer-credit-cards/
pauline baxter

pauline baxter

17 June 2019
i wish to change my email address and why does this email address be shown when prior to entering it states this email will not be displayed?
    Roland B Bleyer - CreditCard.com.au Founder

    Roland

    17 June 2019
    Change what email address? No ones email address is displayed that asks a question. You can see this clearly on each page. Only the display name is used on the site, with the Q+A. Have can I assist you? If you want a previous question deleted. Just let me know what page and the question if possible.
Madalyne

Madalyne

23 January 2019
Hi I am wanting to apply for a credit card, what would be the best to apply for if I have a low credit rating?
    Roland B Bleyer - CreditCard.com.au Founder

    Roland

    24 January 2019
    Hi Madalyne, have a look at the ANZ First. This would be one of the easier cards to get approved for with low minimum requirements. If you are approved, then with good use, your credit will build. Then you can upgrade to a card that would more suit your needs.
Laurie

Laurie

10 December 2018
I have a Comm-bank visa & Comm-bank master spend approx $20k VISA $6k Master have accumulated pasted 7 years 83,931 rewards on Visa, nil rewards paid on Master. Have been with them 25+ years, is there a better option?
    Roland B Bleyer - CreditCard.com.au Founder

    Roland

    11 December 2018
    Hi Laurie, there are so many better options out there than the low rewards on offer from Commbank. Firstly if you can use an AMEX, you can earn Qantas or Velocity points with no annual fee. If you could let me know what type of rewards you are after I can more refine suggestions for you. Have a look at these rewards cards with bonus points.