The Best Rewards Credit Cards in Australia: A Complete Guide

Reward Credit cards are great ways to leverage your daily expenses. They can bring value to your wallet through cashback, points, and travel rewards.

Each card caters to specific spending, so finding the right one depends on your lifestyle, spending habits, and budget.

If you're considering getting a rewards credit card, this blog is the best place to learn about them.

Explore their types, how they work, redemption options, and tips to get Australia's best rewards credit card.

1. What Is The Difference Between A Rewards Card And A Credit Card?

A rewards credit card is more than just a regular credit card. It offers you incentives each time you use it to make purchases.

You earn extra bonuses and some "reward" for each dollar you spend. It is a great way to earn extra on purchases you would have made anyway.

As rewards credit cards offer additional benefits, they also charge steeper interest rates and annual fees. Due to this reason, it is essential to clear your card balance every month to avoid accruing higher interest.

2. How Do Reward Credit Cards Work?

Rewards credit cards reward you each time you use the card to make a payment. The type and amount of reward you can earn using it depends on the:

• The card you choose

• The amount you spend on it

• The terms and conditions of the scheme 

You might earn more rewards for spending in a specific store or the initial few months of buying it. The credit card provider converts spending into rewards such as cashback back, points, or miles when you redeem it.

Based on your card, rewards programs have rules for redeeming your rewards. You can also find a specific selection of what rewards you can redeem.

Some card providers provide an online rewards portal to view and redeem your rewards. Log in to the portal and navigate to the rewards section. You can see your rewards balance and browse available redemption options.

The actual worth of your rewards varies based on the redemption option you choose. Strive to obtain a 1:1 value so you don't undervalue the cash back, points, or miles you earn.

The time required to receive your reward after posting a redemption request depends on your selected option. Where an e-gift card reaches your inbox instantly, it takes up to a week for a statement credit to post to your account.

3. What Are The 3 Main Types Of Credit Card Rewards?

Rewards cards come in three types with their reward currency:

Cashback Reward Cards

• Ideal for people who value simplicity and flexibility

• You earn a fixed percentage of cash back on each eligible purchase you make with the card.

• You might earn cash back at a flat rate of 1% to 2% on all purchases or at a higher rate on specific purchases.

• You can redeem it on the redemption portal on the card issuer's website in various ways, such as: as a statement credit, a check, an electronic transfer to your bank account, merchandise, gift cards, and charity

Points Reward Cards

• Ideal for those who want to maximize their rewards

• You earn a fixed number of points for each dollar spent and a 1:1 conversion

• The conversion rate, reward rates, and redemption options may vary from one issuer to another

• The value of your reward point depends on what you redeem.

• You get flexible redemption options – merchandise, cashback, gift cards, travel purchases , concerts, and sporting events.

• You must use the issuer's online reward portal to redeem your points and choose from the redemption options and values list. 

• Be strategic while redeeming, and choose the option that gives you the maximum value of your points.

Miles

• Ideal for frequent travellers

• You earn a fixed amount of miles for every dollar spent.

• The rate of miles you get may be more in specific categories. 

• To redeem your miles, you can log into your account during the booking process and use it to pay for travel-related expenses such as buy flight tickets, airport lounge access, seat upgrades and booking a hotel room, etc.

4. How Do You Use A Reward Card?

Like a regular credit card, you can use a reward credit card to pay in online stores and retail shops. Common areas where you can use them are:

• Groceries

• Dining

• Travel 

• Gas stations

• Utility bills

• Hotels 

For every eligible purchase, you earn rewards in the form of cashback, points, or airline miles. Besides earning on digital payment channels, you also earn reward points through a "Sign-up bonus" when you meet the spending requirement.

Though each scheme differs, you can redeem rewards in multiple ways after reaching specific points.

5. How To Use The Credit Card Reward Points?

Card issuers usually have a redemption portal on their website that offers different ways to redeem the reward. Some of these include the following:

• Statement credit

• Direct deposit to a linked bank account

• Gift cards

• Travel reservations

• Merchandise

• Charitable donations

• Magazine subscriptions 

• Subscriptions for steaming services

• Stays at hotels and resorts

• Make payment via points at checkout for selected online websites

Before you redeem, make sure you know the rules on rewards redemption and are getting the best value.

6. Which Credit Card Is Best For Rewards?

The right rewards card is the one that suits your spending behaviours, budget, and budget. It helps you pay down your account balance and lets you engage more in things you like to do for less.

With the Canstar rewards credit card comparison tool, you can explore and compare several reward card options and find the best one.

7. The Best Rewards Credit Card In Australia With No Annual Fee

Check the below credit card rewards comparison chart to find Australia’s most affordable reward cards.

8. What Are The Best Travel Rewards Credit Cards?

To find the best travel cards, you should compare them on the following factors such as:

Fees

• Annual fees

• Currency conversion fees

• Overseas ATM fees 

• Cash advance fees

Rewards

Check the earn rate and the type of travel purchases you can redeem your points.

Premium Features

Check for additional perks such as airport lounge access and complimentary insurance coverage.

Ease of Card Use and Account Management

• Merchant acceptability

• Overseas ATM access 

• Security

Below we have organised the best travel cards into two major categories to find the perfect card for your use:

• Low-Cost Travel Credit Cards For Occasional Travellers - ANZ Rewards Travel Adventures Cards

• Bank First Visa Platinum Credit Card

• BankVic Qantas Visa Credit Card

• Bankwest Breeze Platinum Mastercard

• Bankwest Zero Platinum Mastercard

• Coles Rewards Mastercard

• Commonwealth Bank Low Fee Gold Mastercard

• Horizon Bank Visa Credit Card

• HSBC Low Rate Credit Card

• HSBC Premier World Mastercard – Rewards

• ING Orange One Low Rate

• Latitude Financial Services 28 Degrees Global Platinum Mastercard

• Westpac Lite Card

Fully Featured Travel Credit Cards For Regular Travellers

• ANZ Rewards Travel Adventures Card

• Bank First Visa Platinum Credit Card

• Bankwest Breeze Platinum Mastercard

• Bankwest More Platinum Mastercard

• Bankwest Qantas Platinum Mastercard

• Bankwest Qantas World Mastercard

• Bankwest Zero Platinum Mastercard

• Commonwealth Bank Low Fee Gold Mastercard

• Commonwealth Bank Ultimate Awards – Rewards Option

• HSBC Low Rate Credit Card

• HSBC Platinum Credit Card

• HSBC Premier World Mastercard – Qantas

• HSBC Premier World Mastercard – Rewards

• ING Orange One Rewards Platinum

9. Is a Rewards Card Right for You?

Deciding whether you get a rewards credit card depends on multiple factors, such as:

• Your budget (Rewards credit cards generally have high-interest fees than standard credit cards)

• Your spending habits

• Your credit score

Considering the above, Rewards credit cards might be right for you if:

• You have a good credit score, meaning 670 or above

(Premium rewards cards have competitive terms, including high rewards rates, sign-up bonuses, and no annual fees. To get one, you need excellent credit, or else you will have difficulty getting it approved.)

• You carry a low balance or don't tend to have a balance 

• Your spending habits align with rewards card categories

Avoid getting this card when:

• Your credit score is low.

• You don't often spend in rewards card categories.

• You usually carry a balance on your credit cards. As most reward credit cards charge high-interest rates, the interest charged will outweigh the rewards received if you don't clear your balance each month.

10. What Is The Point Of A Rewards Credit Card?

Often people ask, is it worth getting a rewards card? To get to the answer, you need to consider its selling point and whether it will benefit you.

Reward credit cards offer incentives for using the card for shopping, travelling, hotel stays, exchange for goods and services, and more. Some cards also provide higher levels of customer service and perks as rewards.

If you are a person who routinely spends in shops, travel, or other reward categories, and has the confidence to repay your statement balance in full each month, along with the annual fees, then a rewards credit card is worth considering. In other cases, you should stick to the standard credit card.

11. How To Earn More Points On Your Rewards Credit Card?

Optimize your rewards card experience with these strategies:

• Choose the card that offers the highest reward points. American Express cards often give the highest rewards; however, not all retailers accept them for payments. 

• Take advantage of the initial 3 to 6 months of buying a card, as this is when most credit cards offer the chance to earn bonus points.

• Some card issuers offer more points when you spend with selected retailers. So, you can maximize the number of points by identifying and shopping at those retailers.

• Use the card for most of your general expenses, such as monthly bills, groceries, medicines, etc., to accumulate rewards more quickly.

• Spend regularly, but don't overspend to earn rewards. Over-spending beyond your means to accumulate them could lead you to carry a balance, amass interest, and nullify the monetary benefit of the rewards.

• Take advantage of all the perks and freebies offered, such as a free checked bag, free snacks at airport lounges, and more, to maximize savings. 

• Pair different types of reward cards to gain maximum rewards for your spending. For example:

- One that gives you high rewards for spending at restaurants

- A second card that offers free-of-cost checked bags and priority boarding while travelling

- The third card for free nights and other amenities, including complimentary breakfast, early check-in or late checkout, and free internet at hotel chains 

- A fourth card to get a reasonable rate for other forms of spending

• If your card comes with an introductory bonus, combine spending on that card till you receive the bonus.

• Redeem rewards strategically in a way that gives you maximum value. For example:

- Travel cards offer high redemption rates when redeemed for travel expenses like hotel and airline bookings instead of opting for cash back.

- Cash-back cards give you a better redemption rate for statement credit; however, they pay a low rate when redeemed for gift cards.

- Apply for a rewards card a few months before planning a large purchase. Then pay off the balance in full to avoid interest charges.

12. Do Rewards Points Expire?

Not all rewards last forever. Most reward points expire unless you use them within a certain period after you receive them.

Check the terms and conditions of the scheme to find out how long points last. Some programs even forfeit rewards if you don't make your credit card payments on time.

13. How Many Credit Cards Can I Have?

Based on your use, you can have multiple reward credit cards to earn different kinds of rewards. For example, you can accumulate a combination of cash back, points, and miles cards to get the maximum benefit from your purchases.

However, you should know that you can only transfer or combine rewards between the same type of cards or with cards from the same issuer.

It is easier to manage multiple cards from the same issuer. In such a case, you can easily access individual cards with the same login, view their rewards details in one go, and transfer rewards between cards.

14. Who Defines Credit Card Rewards Programs?

The credit card provider is the one who determines different rewards rates, conversion rates, and redemption options.

The number of points you earn depends on the card issuer and the type of scheme and may be limited to a fixed number per year.

15. Can I Check How Many Points I Have?

Yes. Most schemes allow you to check your points balance online, provided that you bank online. If you don't, you can check the same in the periodic statement sent by the provider via post.

16. Do Rewards Cards Build Credit?

Yes. Like any credit card, responsible use of a rewards credit card can help build credit and improve your credit score.

Some best practices for using a credit card to build/improve your credit are:

• Pay your credit card bills and other loans on time to avoid a dip in your credit score. Subscribing to automatic bill pay will help you stay on top of account payments.

• Keep your credit utilization ratio below 30% by not using the total available credit across all accounts.

• Pay your entire balance whenever you can. 

• Only apply for the credit you require. Multiple credit applications in a short span could harm your score.

17. How To Choose A Credit Card With Good Rewards?

Many reward credit cards fit everyone's needs. Picking the right rewards card depends on various factors, such as:

Type of Rewards

Choose a card that fits your lifestyle and gives you the best value based on your everyday spending habits.

Cashback cards are ideal for people who value simplicity and flexibility and want to use them for daily spending. They can redeem the rewards for either cash or as a statement credit.

Points card is an ideal bet for people who enjoy comparing redemption options to grab the best deal.

A hotel or airline rewards credit card is best suited for frequent travellers who want high earning rates on hotel room upgrades, flights, and other travel-related purchases.

Rewards Structure – Tiered/Fixed

Cards with fixed rewards structures pay the same level of rewards irrespective of where you use them.

On the other hand, tiered cards offer varying levels of rewards for different types of purchases. In other words, you can earn more rewards when spent in specific categories, such as groceries, dining, or travel.

The key here is to choose a card with high rewards for the kind of spending you generally do.

Intro Bonus

Many rewards cards give intro bonuses on spending a pre-determined amount during the initial months of owning it. Find cards with a high sign-up bonus and a low spending requirement.

Rewards Expiration

Where some cards come with rewards that expire at a set period, others don't impose an expiration date on rewards.

It means you can use your rewards till your account is open. So, check the card's terms to find out the lifespan of your rewards.

Annual Fees

The annual fee of rewards cards varies significantly from one card issuer to another. When comparing cards, weigh the card's fee against the potential rewards it offers and calculate how its perks could justify the cost.

Interest Rates

Rewards cards generally have higher fees and interest rates than standard credit cards, so you should not carry a balance on a rewards card.

A card with a lower interest rate translates to substantial savings even after the end of the introductory period.

So, look for cards that offer an intro 0% Annual Percentage Rate period. Such cards do not charge interest for a certain period, usually 12 or 15 months.

Cashback Spending Limits

Most cards limit how many reward points you can earn in spending categories. For example, you may get 3% cash back on the first grocery purchase of $1,500 each quarter but only 1% on further spending in that quarter.

Foreign Transaction Fees

Foreign transaction fees generally run about 3% of the purchase amount. When looking for a travel card, ensure the card that doesn't charge a surcharge on purchases made outside the U.S.

The Level of Rewards Offered Per Dollar Spent

Reward cards from different issuers in the same category may offer varying rewards for each dollar you spend.

Check how much each point is worth and compare cards based on the rewards they offer per dollar you spend before making a decision.

Rewards Redemption Limit

Minimum redemption amounts, restrictions, or caps, can make it hard to redeem your rewards. So, make sure you learn about the ease of redemption in different cards before you pick one.

18. How Can You Spend Your Credit Card Rewards Points?

Some schemes send you a voucher by post, while others allow you to choose from various rewards online. You can then use your voucher in a local or online store to which it applies.

If your card lets you use your points instantly, you can present the card in a store or log into your account online and pay with your points without needing a voucher.

19. Conclusion

The landscape of credit card rewards is vast and may be overwhelming for the inexperienced.

While reward points are an intelligent way to benefit from your daily spending, you must spend within your means and understand precisely how the reward program works.

We hope the blog has equipped you with the knowledge to compare and buy the perfect rewards credit card for your needs.

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