Maximise points to make rewards credit cards worthwhile

YOU really can get something for nothing if you know how to use credit card rewards properly, Anthony Keane explains.

EVERYBODY loves receiving something for nothing, and credit card reward programs create an opportunity for this — as long as you use them wisely.

Rewards points generated by my credit card and shopping habits have helped me avoid paying for domestic airfares for about a decade.

LIFEHACKS: Beware the letter of “renewal” for car insurance

Other people prefer to use their points for shopping vouchers or different rewards.

Perhaps I’m a tad addicted to collecting points. I wince when I see people pull out cash or a debit card at the supermarket or decline to swipe their customer loyalty card. C’mon! You’re not going to use those points? Can I use them instead, I say in my head.

Reward schemes have been dramatically watered down in recent years, and took another hit in 2017 when Reserve Bank rule changes led to more tightening.

This just means that points collectors have to get smarter.

Credit cards points programs are only worthwhile if you spend everything you can on them, but be wary about higher surcharges on cards such as American Express. If a shop’s going to slug you 3 per cent for using Amex, keep it in your purse or wallet.

Rewards only work if you repay your card debt within the interest free period. Otherwise the high interest cost of these cards — usually about 20 per cent — outweighs any benefit.

Reward cards also come with high annual fees — often about $400 — so you’ll have to make sure you spend enough to offset that. Some cards offer free travel or a free annual domestic return flight, which goes a long way to offsetting the annual fee.

Also check that your card offers unlimited points earning capacity. Several cards have capped their points at only a few thousand a month, after which their earning power is diluted or disappeared.

Finally, seek ways to double up your point-earning power. Supermarkets accept all rewards cards plus offer their own rewards schemes, although some of these have been watered down in recent years.

LIFEHACKS: How to save big on fuel

Still, a typical family spend on supermarket shopping alone — combined with the right rewards card — can deliver enough points for two or three return flights a year. Something for nothing.