Credit rewards come at a price

CREDIT credit card rewards programs are still not worth it for casual spenders a new report says.

Credit rewards come at a price

CONSUMERS are getting more bang for their buck with credit card rewards programs compared to a year ago, but they're still not worth it for casual spenders a new report says.

Financial research firm Cannex analysed more than 100 credit card rewards programs and found, on average, splashing out $13,500 on plastic will return $100 worth of free stuff.

In the two main categories of rewards - shopping vouchers and Frequent Flyer points - Cannex says the value to consumers has increased by 20 per cent and 7 per cent respectively in the past year.

"A low usage consumer spending $12,000 annually on a card can now expect to receive an average reward return (RR) of $89, which equates to around 74 per $100 spend,'' the firm says. ``A year ago, the average RR was 61 per $100 spent.''

When it comes to Frequent Flyer rewards, Cannex says consumers are also getting more mileage, particularly with domestic flights.

"Currently, a Sydney-Melbourne flight requires an average $18,630 spend, down from an average of $20,000 in January 2007.'' But some cards reward you after spending only $8000 while others want as much as $36,000.

It's also not worth signing up for a rewards program unless you intend to use your card a lot - and can pay it back in full each month.

Cannex found two-thirds of rewards programs offered no positive return for consumers who spent under $12,000 a year.

"When choosing a rewards program, it's important to remember that, on average, you are likely to be paying for the privilege through higher interest rates and annual fees.''