Rewards Credit Cards

An easy but complete guide to rewards credit cards

Rewards credit cards earn points for your everyday spending, or give you a lump sum of bonus points when you apply. You can redeem your points on a variety of perks and freebies, from flights and accommodation to merchandise and gift cards.

In this guide, we’re going to explain how reward cards work and how to earn the most points from them. 

How do you earn points?

Earning points is as easy as using your card for everyday transactions. If you’re super-savvy, you can use your card for expensive purchases – for example, a flat screen tv or a new couch – and pay it off immediately just for the points.

Every card will have a different ‘earn rate’, which is the number of points you receive for every dollar you spend. 

What about bonus points?

Some reward cards will offer bonus points (which could be as high as 200,000 points) that you can earn when you sign up as a new customer. Bonus points can sometimes be enough to cover entire international flights, making them one of the card's biggest perks.

What’s the best rewards card?

Honestly, the best rewards card is the one that earns enough points to make you the winner at the end of the day. 

Rewards cards aren’t for everyone, especially if you don’t usually pay off your card each month. Paying interest really eats into the value of your points! 

Here are a few things to think about:

Next, let’s look at the different types of programs you can redeem points with. It will help you decide what kind of rewards card you’d like.

What programs can you earn reward points with?

Airlines and credit card providers all have unique programs. That means you can choose which program will give you the most benefits; for instance, frequent travellers might like to earn Qantas Points, while everyday shoppers might prefer Flybuys or ANZ Rewards.

Here's a snapshot of the different rewards programs available in Australia.

Airline programs that use frequent flyer points:

• Qantas Frequent Flyer. You'll earn Qantas Points that have the most value when used for flight upgrades and flights, although you can also redeem points for hundreds of retail items, the Qantas Wine club and gift cards through the online Qantas Marketplace.
• Velocity Frequent Flyer. Velocity is Virgin's loyalty program and points can be redeemed for flights and upgrades, car hire and hotel bookings, plus products and gift cards.

Financial institutions that use rewards points:

• Amex Membership Rewards. Amex's loyalty program is an all-rounder that redeems points for entertainment and unique member experiences, shopping and even travel through Amex Travel Online.
• Flybuys. You can earn Flybuys by signing up for free, and double-dip with a credit card that earns Flybuy points. Flybuys can be redeemed at Coles supermarkets for items or money off your shopping, spent at partnering stores or converted into Velocity Frequent Flyer points.
• NAB Rewards. Earn bonus points at participating brands (including dining) and  NAB's exclusive Boosted Offers. NAB Rewards can be used for gift cards, cashback, shopping, entertainment and more.
• ANZ Rewards. ANZ gives you the option of redeeming points for retail products, gift vouchers, entertainment and travel. You can transfer points to the Velocity, Singapore Airlines Krisflyer or Air New Zealand frequent flyer programs.
• Bankwest More Rewards. Bankwest's loyalty program gives you the option of redeeming points for cashback, so you can spend your money however you like. Or, you can redeem points for experiences, shopping and gift cards.
• St.George Amplify. Amplify Points can be redeemed within the St.George rewards portal for goodies like shopping, gift vouchers and entertainment.
• Bank of Melbourne Amplify. Use your points for gift cards, shopping, and charitable donations. You can also redeem them for frequent flyer points with Virgin Australia and Singapore airlines.
• HSBC Rewards Plus. Rewards Plus points can be redeemed as cashback on your credit card, turned into gift vouchers or used for travel. HSBC Rewards Plus points can be converted into Velocity points for flights and upgrades.
• Westpac Altitude. From gift cards and cashback to partner airlines, Westpac Altitude Points give you plenty of ways to redeem your points. Altitude Reward points can be used with partnering frequent flyer programs such as Velocity, Kathay Pacific and Singapore Airlines Krisflyer.
• Citi Rewards. Use cashback to purchase items for free, or use your Citi Rewards points to Pay With Points at partner brands such as Kogan and Apple. Citi Rewards points can also be redeemed for Flybuys.
• Commbank Awards. These points can be redeemed directly with Myer and Flight Centre, or online for gift cards, cashback, electronics and travel. You can also redeem them for Qantas and Velocity frequent flyer points, plus other airline loyalty programs.

Comparing rewards cards to find the right one

We try to make it as easy as possible to compare cards, but you’ll need to know a few basics first. Think about these factors when you’re comparing rewards cards.

How do you redeem your points?

This is the fun part. Depending on the program, you can use your points for:

• Travel: one of the best perks is discounted – or even free – travel and holiday purchases. You can book accommodation, flights, rental cars, tours and cruises to pretty much anywhere in the world.
• Retail merchandise: use your points for everyday items at retail stores. Think clothing, homewares, technology and beauty products.
• Gift cards: some rewards cards allow you to redeem points as gift cards, which gives you the flexibility of using the cash wherever you like (or give it as a gift).
• Cashback: you might be able to spend your points as money, which can take the form of cash in your pocket, a credit on your rewards card, or a payment towards your annual fee.

To redeem your points, you can:

• Use the provider’s online rewards store to buy products or gift cards
• Pay with your points at selected retails stores (and fill in any gaps with cash, called Points + Pay)
• Use an eligible travel agency or shop direct with airlines like Qantas and Jetstar

Here’s a step-by-step for redeeming your points online:

1. Check how many points you have to spend. You’ll usually be able to do this through your credit card app or online portal. You’ll need to use the airline website to redeem Qantas or Velocity points, or points through partner airlines. 
2. Check out your reward options. Browse your card’s online marketplace or the airlines website for items you can redeem your points on. You’ll often have options to use points to cover the cost, or use Points + Pay to cover the remainder with cash.
3. Choose it and click submit. When you’ve found what you’re looking for, just hit the redeem button. Then it’s a matter of waiting for the order to arrive.

What purchases won’t earn points?

Ooh, this is where that tricky phrase ‘eligible transactions’ pops up. Not everything you buy earns points, and you’ll only find the list of ineligible transactions in the card’s terms and conditions. 

Here’s what most rewards cards won’t give you points for:

• Cash advances. A cash advance is a withdrawal of money from your credit card, and it attracts immediate interest, but no rewards.
• Balance transfers. Popping your debt from a credit card onto your rewards card won’t earn any points.
• BPAY payments. Online BPAY payments don’t count towards point earnings either, unfortunately.
• Government payments. Most rewards cards won’t accrue points by making payments to the ATO, although a very small selection do. You’ll need to check the rewards program and the small print.

Frequently asked questions about rewards cards

❓ How much do I need to earn for a rewards card?

All cards have different income requirements, and many credit card providers don’t give a figure anymore. It’s safe to say that a premium card - which might cost $300 to $450 per year will have a higher income requirement. For instance, you might need to earn around $75,000 per year.

❓ Can I do a balance transfer on a rewards card?

Yes, some rewards cards have balance transfer options. Some might even have special offers that mean you won’t pay interest during a promotional period. You can also look at our balance transfer comparison guide. 

❓ I’m seeing the words ‘platinum’ and ‘premier’ everywhere. What does that mean?/

Those words mean the card is considered a higher-tiered card and comes with more extras (and likely a higher annual fee). Let’s take a quick look at each.

❓ What purchases won’t earn points?

Generally, most rewards programs won't give you points for cash advances, balance transfers, BPAY payments and paying card fees. Some cards will give you points for government payments and others won't. Check our review and the PDS to see if you can earn on government payments.

❓ I want the maths on rewards point values. How do I calculate it?

Working out the value of a reward point isn’t straightforward. The value can change depending on how it’s redeemed; for instance, you’ll get the most value out of flights and upgrades for Qantas Points compared to a gift card or cashback. 

But, you can use a pretty simple trick to work out the value of points:

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.

❓ Can I earn points using BPAY?

Not usually. You’ll need to check the eligible transactions list in the card’s terms and conditions. 

❓ Do rewards points expire?

The expiration of your rewards points depends entirely on the provider. Some offer no expiry date on points, some lapse unless you redeem at least some points within a certain timeframe, and others will disappear entirely if there’s no action on your account.

Check your provider’s expiry policy so you don’t lose your hard-earned rewards if you leave your account dormant.