Credit card reward schemes: Finding the right program for you

If you are looking for the best credit card rewards program for you, Click4credit.com.au can simplify the process and save you time and money.

The first step in choosing the right credit card rewards program for you is to identify what type of rewards you want. Do you prefer air travel, shopping vouchers, household items etc?

There are three categories of credit card reward programs. These are:
* Frequent flyer,
* General and
* Instant rewards.

Many cards offer a combination of rewards, although they may be specifically geared to one main benefit. Your credit card spending and repayment activities directly affect the benefits you receive from a credit card reward program.

You need to spend an average of $20,000 on most credit cards to earn a return economy domestic flight ticket (short-haul). Premium credit cards, however, only require just over half the spending for the same benefit.

A points-based rewards program is best suited to a card holder who uses their credit card frequently and pays the entire balance monthly. If you don’t have high credit card spending, a no-frills credit card which offers instant rewards will be far more beneficial.

The amount a customer needs to spend on their rewards credit card to get exactly the same benefit, varies greatly between cards. Holders of what are considered premium credit cards such as American Express Platinum need to spend approximately half of the industry average to accrue enough points for domestic flights. Although the annual fees on these platinum cards are high, card holders can earn between 1.5 and 3 points for every dollar spent as calculated by Cannex Australia.

The American Express’ Platinum card, Gold Charge Card, Gold Credit Card and Gold Reward Maximiser are clearly among the best deals on offer for general rewards. For Qantas Frequent Flyer rewards the American Express Platinum card is superior. To achieve the same domestic flights from most other cards requires a wide variation in spending. For example, most credit card rewards programs require the customer to spend at least $16,000 in spending for the same flights.

There are also wide variations in spending needed to earn enough points for international flights. For example, the American Express Platinum card will reward a customer who spends $85,333 with a Sydney to London flight or equivalent. However, the same trip would require spending of $128,000 on the Citibank or St George platinum card. Clearly, for frequent international travellers the annual American Express fee is worth the price.

The rewards value offered by many gold and standard cards is, in fact, superior to some of the platinum cards for a much lower annual fee. For example, HSBC’s Amex Gold card has an annual fee of only $70 and an annual percentage rate (apr) of only 16.49%. The St George Platinum Visa and Mastercard is also worth considering. Although customers need to spend $16,000 to redeem the same domestic flight earned by $10,667 spending on an American Express Platinum card, the interest rate is a low 12.99% with an annual fee of a comparatively low $89. The Qantas Frequent Flyer card, Qantas AMEX Premium Card, sitting comfortably in the middle ground offers an apr of 17.74% and an annual fee of $195 and requires spending of only $12,800 to redeem an equivalent domestic return flight.

The new kid on the block, the Earth+ Credit Card, is well worth considering. They offer well thought out rewards programs designed to capture a decent market share quickly. For a short time only they are waiving the normal $82.50 membership cost for the Qantas Frequent Flyer rewards program. The 15.24% interest rate and additional travel savings and benefits offered may well have an earth shattering effect (forgive the pun) on the local rewards market.

For those with a lower annual spend or who don't want to wait for points to accumulate an instant rewards scheme may work well. Instant rewards can be redeemed at any time and come in the form of instant discounts and special offers with a range of partner companies. On credit cards with instant rewards is Virgin Money which offers Mates Rates with partner companies including VideoEzy, VirginBlue and many more.

Researching the best credit card rewards programs for you can be very time consuming. Click4credit.com.au is a new Australian credit card comparison site offering information and online applications for rewards credit cards.

Compare Credit Cards offering rewards - choose the type of rewards you wish to receive:

* Qantas Frequent Flyer Points

* General Reward points - earn points to redeem on items of your choice

For additional information on credit cards or related topics please visit our library of credit card articles.