Credit card customers hit by dismal returns on credit card rewards programs

Shoppers chasing credit card rewards points have to spend more than $133,000 just to get a $200 toaster. Find out the worst credit card deals on the market.

Exclusive: Credit card customers chasing rewards points need to spend up to $133,000 just to score themselves a kettle, alarming new findings show.

Lenders have become tighter in the past few years giving customers less value for money when they rack up thousands of dollars on their cards.

In some cases providers give customers just one quarter of a point for every dollar spent.

New analysis by financial comparison website RateCity has found some of the worst returns on cards are offered by the big banks.

RateCity’s chief executive officer Paul Marshall said the value from rewards programs has continued to deteriorate.

“Over the last few years rewards credit card earn rates have generally been getting worse but if you compare carefully you may still be able to find a card that offers you value,” he said.

The interchange fee regulations changed in recent years, reducing the amount merchants could be charged for accepting plastic.

Credit card customers are getting stung falling rewards points.

These fees had previously been big money earners for credit card providers, meaning they need to look elsewhere to recoup costs.

To get a $200 SMEG kettle some of the worst value cards include:

• ANZ’s Frequent Flyer — spend required $133,470.

• Westpac’s Altitude Qantas — spend required $77,860.

• NAB Qantas Rewards — spend required $74,520.

• NAB Rewards Classic — $55,280.

• Commbank Awards — $51,900.

This involves customers earning points and then redeeming them through the Qantas store.

And despite ANZ coming out as the worst card to get the kettle, a spokesman from the bank said they have a range of cards on offer.

“While it is technically possible for customers with one of our Frequent Flyer cards to exchange those points for items other than flights, we would strongly recommend they consider an ANZ Rewards card as it is better suited for those purposes,” he said.

In some cases providers give customers just one quarter of a point for every dollar spent.

Mr Marshall said everyone loves getting something for nothing but it ultimately comes at a price.

“Unless you’re a big spender many of the rewards credit cards on offer just aren’t worth it.”

Card provider American Express has planned changes to their rewards programs from April 15, further diminishing the value given to customers.

Financial adviser Scott Haywood said customers should be careful when trying to earn points.

“Once people get a credit card they might be attracted to the points at the start but they become complacent with the program,” he said.

“People haven’t been attracted to points recently unless you get a new deal and can get 100,000 bonus points.”

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How to get good value from rewards

High value: Flight upgrades — generally upgrades give you the highest dollar value for your points.

Medium value: Flights — international flights usually offer better dollar value for points than domestic.

Lesser value: Gift vouchers & products — these often give you the least dollar value for points redeemed.

Source: Ratecity.com.au.