Many Australian card issuers have frequent flyer programs attached to their credit cards. Whilst frequent flyer programs can be attractive you should endeavor to see whether they are worth it.
Rewards programs and frequent flyer cards have been popular in Australia for quite a while now. Whilst some cards come with their own tailor made rewards program, other cards link their rewards program to a frequent flyer program with a specific airline such as Virgin or Qantas. There are some cards which are issued in Australia that entitle you to earn frequent flyer miles with international carriers.
The biggest attraction of a frequent flyer program is that it enables you to earn a free flight simply by using your credit card, money that in all probability you would have spent anyway. If you put all your monthly expenses on your credit card, then rewards programs and frequent flyer miles can add up to as many as two free flights a year, depending on how much you spend.
How they work
Frequent flyer rewards programs are pretty simple. You earn a certain number of points for every dollar spent on your credit cards which you can use towards a frequent flyer program. In Australia the two most popular programs are offered by Virgin and Qantas.
If you want to take advantage of these rewards make sure you are a member of the frequent flyer program, otherwise you will earn the points but be unable to convert them into miles. You need to make sure that both your card and your membership are linked, and if this is done properly, then at the end of every billing cycle, your points will be transferred from your credit card to your frequent flyer account.
What to look out for
When you are looking at frequent flyer credit cards you should first check how many dollars the card requires you to spend for each point earned. Generally most cards have a ratio of 1:1 or a point earned for every dollar spent. Increasingly however, the trend of increasing the amount card holders must spend to earn a point is taking hold, and many cards now offer one point for every two dollars spent.
Obviously the goal is to have a card that gives you the maximum amount of points for the cash you spend. That needs to also be balanced against the cost of the annual fee and the interest rate for carrying a balance on the card. It would be a waste of time trying to earn extra points towards a free flight if it costs you more in annual fees and interest.
Some credit cards place limits on the number of points it is possible to earn every calendar month. If you are someone who uses their credit card for all your monthly spending, then you should make sure you are aware whether this is the case. Some frequent flyer cards offer unlimited points, however these cards tend to charge higher annual fees.
The most common mistake people make is spending more on their card to earn more points. That strategy is wasted if the balance is not cleared at the end of every month, because interest will be charged which will far outweigh any benefit earned from the points.
Is a frequent flyer card right for you?
The main thing you should look at is whether the amount you spend on a frequent flier reward card is enough to gain any real benefit from such a program. These cards tend to cost more in annual fees and sometimes even interest. If you don't spend very much on your credit card, a frequent flier card may simply not be worth it.
If that happens to be the case it may be worthwhile opting for a low interest rate credit card rather than a credit card which comes with a reward program such as frequent flier miles. If you are someone who spends a lot of cash on your credit card and clears the balance at the end of every month, particularly if you are a business user, rewards programs and frequent flier credit cards are certainly going to be an attractive option.
Rewards programs and frequent flyer cards have been popular in Australia for quite a while now. Whilst some cards come with their own tailor made rewards program, other cards link their rewards program to a frequent flyer program with a specific airline such as Virgin or Qantas. There are some cards which are issued in Australia that entitle you to earn frequent flyer miles with international carriers.
The biggest attraction of a frequent flyer program is that it enables you to earn a free flight simply by using your credit card, money that in all probability you would have spent anyway. If you put all your monthly expenses on your credit card, then rewards programs and frequent flyer miles can add up to as many as two free flights a year, depending on how much you spend.
How they work
Frequent flyer rewards programs are pretty simple. You earn a certain number of points for every dollar spent on your credit cards which you can use towards a frequent flyer program. In Australia the two most popular programs are offered by Virgin and Qantas.
If you want to take advantage of these rewards make sure you are a member of the frequent flyer program, otherwise you will earn the points but be unable to convert them into miles. You need to make sure that both your card and your membership are linked, and if this is done properly, then at the end of every billing cycle, your points will be transferred from your credit card to your frequent flyer account.
What to look out for
When you are looking at frequent flyer credit cards you should first check how many dollars the card requires you to spend for each point earned. Generally most cards have a ratio of 1:1 or a point earned for every dollar spent. Increasingly however, the trend of increasing the amount card holders must spend to earn a point is taking hold, and many cards now offer one point for every two dollars spent.
Obviously the goal is to have a card that gives you the maximum amount of points for the cash you spend. That needs to also be balanced against the cost of the annual fee and the interest rate for carrying a balance on the card. It would be a waste of time trying to earn extra points towards a free flight if it costs you more in annual fees and interest.
Some credit cards place limits on the number of points it is possible to earn every calendar month. If you are someone who uses their credit card for all your monthly spending, then you should make sure you are aware whether this is the case. Some frequent flyer cards offer unlimited points, however these cards tend to charge higher annual fees.
The most common mistake people make is spending more on their card to earn more points. That strategy is wasted if the balance is not cleared at the end of every month, because interest will be charged which will far outweigh any benefit earned from the points.
Is a frequent flyer card right for you?
The main thing you should look at is whether the amount you spend on a frequent flier reward card is enough to gain any real benefit from such a program. These cards tend to cost more in annual fees and sometimes even interest. If you don't spend very much on your credit card, a frequent flier card may simply not be worth it.
If that happens to be the case it may be worthwhile opting for a low interest rate credit card rather than a credit card which comes with a reward program such as frequent flier miles. If you are someone who spends a lot of cash on your credit card and clears the balance at the end of every month, particularly if you are a business user, rewards programs and frequent flier credit cards are certainly going to be an attractive option.