When using a rewards card, your spending will attract a certain earn rate, which is the number of points you will earn for each dollar spent. You will usually find cards with higher annual fees, such as platinum cards, offer a higher earn rate. While this can allow for a faster accumulation of points, you will have to spend more to make that higher annual fee worthwhile.
Depending on the card, you may be able to earn bonus or additional points to boost your points total. This may mean spending at partner retailers, or redeeming points through special deals.
As you can see from the run-down on rewards programmes above, redemption options are usually pretty flexible. You may be able to redeem points directly with partners, or shop at the rewards programme’s online store. Travel is often included as an option, allowing cardholders to use their points to book travel arrangements with partner travel agents, or convert points to partner frequent flyer programmes.
It’s a good idea to compare all redemption options side-by-side, as not all will offer the same value. For example, you may enjoy more value converting your points to frequent flyer miles, which can then be used to cover flights and upgrades.
Tips For Choosing A Rewards Card
Consider the Annual Fee
To find true value from a rewards card, you need to earn more in rewards than you pay out in annual fees. Calculate your expected annual spend, work out what that equates to in points value, then weigh that against the annual fee.
If you carry a balance, you will pay interest. That will likely negate the value of any rewards you get back. If you typically carry a balance, a low rate card may be a better option.
Check the Earn Rate
A higher earn rate will allow you to stack up points faster. However, a higher earn rate usually comes with a higher annual fee. Unless you spend enough to make that annual fee worthwhile, a card with a lower annual fee and earn rate may offer more value.
Check For Points Caps
Some rewards cards cap the number of points you can earn each month, or per year. After calculating your expected spend, you think you will spend over this points cap, you may be better opting for a card that either has a higher points cap, or no points cap at all.
Investigate Intro Offers
Rewards cards can provide all kinds of enticing introductory offers, including waived annual fees, 0% purchase offers, bonus points offers, and balance transfer deals. Think about what matters most on the card to you, then consider whether the intro offer adds to that or detracts from that. Remember, bonus points offers usually require a minimum spend.
Examine Rewards Options
Take a closer look at what each of the rewards programmes offers, paying close attention to partners, points value, and the opportunity to earn bonus points. Make sure the programme suits your needs, giving you rewards you actually want to use.
Time to compare rewards cards? This is the place to be! Check out the wide range of rewards cards here on CreditCard.co.nz to apply today.