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Best Rewards Credit Cards Australia: Earn Maximum Points

How do rewards credit cards work?

Rewards credit cards are a type of credit card that allows cardholders earn rewards points on eligible purchases made with the card. Points can then be redeemed through the card’s rewards program. Rewards can include cashback, gift cards, cosmetics and homewares, or even flights and accommodation.

Rewards credit card points are usually matched to a certain spending value. A common example is 1 rewards point for every $1 spent. But some premium rewards cards offer higher earn rates.

Likewise some business credit cards and corporate credit cards offer particularly high levels of rewards.

Types of reward you can get

Depending on the reward program you join, you may be able to choose from thousands of individual rewards. Some of the most common examples of rewards include:

Gift vouchers & credit card cashback Cosmetics

Home & kitchenware

Outdoor & sporting equipment

Electronics

Entertainment tickets for sports, events, or movies

Flights and accommodation

Rental cars

Charitable donations

If you to get full value from a rewards credit, just picking any old card and waiting for the points to flow build up probably won't cut it . Here are some simple point pointers to consider.

1. Look for bonus points

Take advantage of rewards credit cards with bonus sign up offers (assuming the credit card is overall a good match for your situation).

2. Check the earn rate

Consider cards with higher point earn rates (again assuming the card overall is good value).

3. Check eligibility for rewards

Make sure you understand which purchases are eligible to earn points and which aren’t.

4. Match the card to your spending habits

Match the card to your spending habits. If you travel a lot, a frequent flyer credit card may mean you earn more points. There are also travel credit cards with extra perks related to overseas use.

5. Use your credit card for everyday purchases

Ones you would be making anyway and you can comfortably afford to pay off.

6. Earn bonus points

Some rewards programs allow you to earn points by hitting non-financial targets, like walking a certain number of steps per day.

7. Share the card with your partner

Most credit cards allow additional cardholders (e.g. Amex credit cards allow up to four at no extra cost). If more than one person is using the card, you'll likely earn more rewards points (again watch for overspending).

8. Pool points with friends and family

Some rewards programs allow point transfers between family and friends. This can help make it more likely you’ll get the most from your points.

9. 'Volunteer' to pick up the bill

For split expenses with friends, family or roommates, offer to pay (and earn points) and have the others send you the money.

10. Redeem your points wisely

Look for the rewards perks that will get you most bang for your points (but above all else, make sure you actually use them).

Don't forget to think about fees and other costs. There's no point earning a tonne of points if you're also paying through the nose in fees and interest.

Rewards credit card expert tip

Brad Kelly, Credit Cards Expert

"There are plenty of options but not all of them are good. For my money, the best rewards program is American Express Membership rewards – e.g. you can to transfer points to a wide range of airline programs. But for any rewards program, unless you are a BIG spender they are often not worth it as the fees outweigh the benefits. The average Aussie spends about $2,500/month on their card. This won’t get you a toaster."

Brad Kelly, Credit Cards Expert

How to choose a rewards credit card

Rewards credit cards can offer a range of benefits, but choosing the wrong card could end up costing you more than you get back. The average monthly credit card spend in Australia is around $2,500 – will you be spending enough to get sufficient rewards back?

Rewards credit cards are often available in various tiers, based on the amount you are likely to spend on the card each year. Finding the rewards card that suits you will depend entirely on how you plan to use the card.

Below are some factors to consider when choosing a rewards credit card.

Match it to your income and spending habits

How much you earn each year will affect how much you are able to spend on your card, and the value of the rewards you may receive in comparison to the card’s fees. Different rewards cards have different minimum income requirements. You may need an annual income of up to $100,000 to qualify for some premium credit cards.

But be wary of spending more than you otherwise would just to earn reward points.

Watch out for fees

Annual fees are particularly important when your'e choosing a rewards card. Because, they're usually pretty high – over $500 in some cases.

If your rewards card's perks won't stack up when valued against the annual fee, the card will actually be costing you money overall. In this case, a no annual fee credit card is a possible alternative.

Don't forget the other reward card fees that could apply depending how you use the card, like international credit card fees for payments made overseas. You may be able to find credit cards with no international fees that still offer rewards.

Then there are miss payments fees and fees to do a credit card balance transfer.

Find a low interest rate

Rewards credit cards are not ideal if you carry a revolving balance on your card from month to month as interest rates are high (usually 20% plus).

If you think it’s possible you won’t always pay off your balance in full, aim for the lowest interest rate possible. Or consider a low rate credit card.

It's also possible to access rewards through some special offer interest-free credit cards, with a 0% rate for a limited time.

Alternatively, a card with a high number of interest-free days will give you more leeway to pay off the purchases without incurring interest at those high reward card rates.

Consider your points eligibility

Some cards will offer more points for purchases made for specific items, while some bills or purchases may not be eligible for points at all on certain cards.

It's important that the card you choose is compatible with the your existing spending.

In other words, will the types of purchases you make already actually earn you points, or will you end up needing to change things up to earn more points?

Don't forget the point caps. Some cards include a cap for earning points on purchases (e.g. 100,000 per year). Or the earn rate might taper off as you spend more (e.g.1 point for every dollar spent up to $10,00 and 0.5 points for every dollar above that).

Choose the right rewards program for your needs & lifestyle

Ideally the points you earn will be redeemable for products and other purposes you will actually value. The last thing you want is bucket loads of points you won’t use (don’t forget, some reward points expire).

Check what offers and brands the card's rewards program has in its rewards store to see if you're likely to use it.

Before you apply for a rewards credit card, make sure you meet the qualifying criteria. This is usually:

Be over 18 years of age

An Australian citizen or permanent resident

Have a good credit score

Have an annual income above the lender's cut off

Qualifying criteria will vary between lenders and cards, so it’s important to compare credit cards before applying to ensure you are eligible. Doing a free credit score check in advance can also help.

You can apply for a rewards credit card online, over the phone, or at your bank. When applying, you will need to provide supporting documentation so the card issuer can accurately assess both your application and your ability to meet repayments. This will likely include:

1

Personal details (name, date of birth, address etc.)

2

Valid identification - such as a driver licence or passport

3

Details of your assets – such as your home and a car if you own one

4

Details of your current expenses and other loans you may have.

5

Employment details - including your employment status, employer contact details, salary information, and payslips to verify your income. If you're self-employed, you will need to provide alternative documents, such as previous tax assessments, instead of payslips.

Is a rewards credit card worth it?

If you use the card responsibly, rewards credit cards can be a handy way to access perks (e.g. some credit cards come with travel insurance included) and earn points on eligible purchases made with the card. This has become a fundamental part of how credit cards work.

These points can be redeemed for flights, upgrades, gifts, or other rewards, and each card will differ in both how points can be earned, and how they can be spent.

At their best rewards cards mean the cardholder gets more value in perks than they pay in fees. In other words, you earn rewards for spending you would be doing anyway.

But for some people, the high annual fee typically charged on rewards credit cards cancels out all of the value of the benefits. In other words, some people pay more than they get back in rewards. There can be a temptation to spend more to boost the rewards.

The key is assessing rewards credit cards based on how you spend currently, and maximising your points earning without spending more than you otherwise would.

One way to determine whether a rewards card may be suitable for you is to:

Calculate how much you spend each year

Calculate how many points you will earn

Calculate the associated value of these points

Compare the value of your points with the fees included with the card

To calculate the associated value of your points, simply divide the number of points required to redeem a reward by its recommended retail price (RRP). The result will be the number of points needed to claim $1 of a specific reward amount.

Popular credit card rewards programs in Australia

American Express Membership Rewards

Amplify Rewards (St.George Bank, BankSA, Bank of Melbourne)

ANZ Rewards

Bankwest More Rewards

Bendigo Bank Rewards

Citi Rewards

CommBank Awards

Flybuys Rewards

HSBC Rewards

Latitude Infinity Rewards

Macquarie Reward

NAB Rewards

Qantas Frequent Flyer

Suncorp Credit Card Rewards

Velocity Frequent Flyer

Westpac Altitude Rewards

Your questions answered

What is the maximum credit limit on a rewards credit card?

Rewards credit cards have a minimum credit amount of $500, and a maximum credit limit of $100,000 (if you get a charge card, there is theoretically no limit).

But reward credit card limits are personalised to you. The amount of credit that you can access from a lender is determined by your:

Income

Credit score

Overall financial health

The credit limit on your credit card (not the balance) is a factor lenders will use when assessing future applications for home loans and personal loans, so try and avoid a very high credit limit if you don't need one.

What spending doesn’t qualify for points on rewards credit cards?

You may not earn credit card rewards points on every purchase or transaction. The rules will vary by card provider, but some common examples of when you won't earn points include:

Spending with the government (e.g. paying a tax bill)

Cash advances (withdrawing cash)

Buying foreign currency

Paying card fees or interest

Gambling and gaming

How do I use a rewards credit card?

You use a rewards credit card the same way you would with a normal credit card. Remember to verify your eligibility for earning points on your purchases before using your card, and always repay your balance in full to avoid interest charges. Alternatively there are charge cards offering rewards that do not come with interest charges, but the balance must be cleared in full each month.

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

Although it’s not common, some rewards credit cards may include a balance transfer offer.

Keep in mind that a balance transfer does not wipe out your existing debt, it simply transfers it. You will still need to repay your balance transfer amount, and ensure the interest-free period is sufficient for you to make repayments without incurring interest charges. After the balance transfer period the card's standard interest rate will apply, which will likely be high on a rewards card.

Consider whether that's a suitable option if you are intending to transfer a balance from another credit card.

Why do rewards cards come with high annual fees?

Rewards credit cards often include higher annual fees than other cards. This is relative to the number of features and benefits they offer. In simple terms the annual fee is the cost of the rewards and features. For example, for a credit card with free airport lounge passes, there is a cost to the credit card company for offering this.

Certain cards are designed to reward high-income, high-spending customers - and you should always compare cards to ensure you are choosing a card that will work for you.

Which rewards programs can I join?

The rewards program you join will largely depend on the card issuer you choose to apply with. Banks will often have a range of rewards from their partner companies - this may include airlines (e.g. credit cards with Qantas points) or retailers. You can also find store-branded rewards cards, though these are only specific to a certain number of stores - such as Woolworths, Myer or David Jones.