Getting To The Point Of Rewards
Sun Herald
Sunday November 30, 2008
Canny shoppers make the most of loyalty programs, writes Helena Keers.
RETAIL therapy is all well and good but the feel-good factor doesn't last very long when the bills start rolling in. That's a fact. Here's another: there's a way to keep those good feelings from dissipating - make the most of reward programs. Food, clothes, furniture and even coffee shops are increasingly introducing reward cards to customers. With a bit of research you can get more for less.Take coffee reward cards. Every time you buy a coffee from the same vendor you get a stamp on your coffee reward card. After you've got nine stamps, you get your 10th coffee for free. Easy. Store cards and credit cards are a bit more complex but the idea is the same. Before you get too excited though, there are a few drawbacks. Financial analyst at Cannex, Frank Lopez, says rewards cards are great if you use them regularly and for big purchases and you pay off your balance. If you don't stick to these rules, you'll find the cost of signing up outweighs any advantage.If you think you can handle the challenge then you're ready to research your options. Both Choice and Cannex have helpful websites that compare different rewards cards. To help you get started, we've done some of the research for you. Below are some of the top credit cards, supermarket cards and store cards to help you rack up the rewards points. See the panel at right to discover how you can pay off your credit card with points and whether it's actually worth it. * CREDIT CARDSWith 92 points-based rewards schemes fanned out across 153 credit cards in Australia, there is plenty of choice. But be careful of how much you spend. If you fork out $60,000 a year on your card you'll net an average return of more than $350. But if you only spend $12,000 a year, or $1000 a month, on your credit card, you're going backwards on 41 out of the 92 general rewards programs available, according to Cannex. One credit card the firm rates highly is the Westpac Altitude Platinum American Express (and its companion card, the Altitude Platinum MasterCard, for cash advances). The Altitude Rewards program offers a range of redemption and travel options including the opportunity to redeem Altitude points for frequent-flyer points in the frequent-flyer programs of Air New Zealand, Virgin Blue, Malaysia Airlines and Singapore Airlines and, until March 31, the Qantas program.You earn three points for every dollar spent and two points for every mile flown and your points never expire. There are 45 interest-free days and the interest rate is 20.74 per cent. Be prepared for the hefty annual fee of $295, though. In the wake of the Qantas plan to partially sell off its frequent-flyer program, this card (and many others) will no longer earn Qantas frequent-flyer points on everyday spending from April next year. By then, only 12 credit and debit cards will continue to offer new customers the ability to earn Qantas frequent-flyer points. So cards provided by American Express, ANZ, Westpac and Diners Club, for example, have co-branded cards with Qantas. Other providers have opted to sign up with Virgin's Velocity rewards program.Lopez says: "In the majority of cases, you may even be better off under the new frequent-flyer arrangements but you've certainly got time to look around and see which points program is going to reward you the most."* SUPERMARKET SPECIALSSupermarket credit cards are just like coffee cards - you get rewarded for your loyalty.Let's say, for example, that you buy your groceries at Woolworths and you use a Woolworths Everyday Money card, for the purchase. For every dollar you spend on Woolworths' premium home brand Select items, you earn three points. For every dollar spent within the group (including Woolworths, Safeway, Big W, Dick Smith, BWS, Dan Murphy's, Powerhouse, Caltex Woolworths and Tandy) you earn two points and one point for every dollar spent anywhere else you choose to shop.These points soon add up and every four months you receive a Woolworths shopping card to use at any of the group's shops or petrol stations. If you've managed to earn 3450 points over four months, you'll get a shopping card worth $20 (the minimum amount) that expires after three months.To sweeten the offer, Woolworths waives the $49 annual fee for the first year and interest on new purchases until February 1 next year. Meanwhile transfers from other credit cards will be charged a lower interest rate of 5.99 per cent, for the first six months.Be warned though, like most store cards, the Woolworths Money card works best when you pay your balance in full during the 55-day interest-free period. If you don't pay off your balance, you'll get hit with an 18.99 per cent interest charge for purchases and 21.99 per cent for cash advances. For loyal Coles shoppers, there's the Coles Group Source MasterCard. There's no annual fee, a 62-day interest-free period and no interest for six months on balances transferred from other cards. But the interest rate is 20.25 per cent and you have to belong to the FlyBuys program.For every $5 spent within the Coles group (including Coles, Target, Kmart, Officeworks, Bi-Lo, Liquorland and Vintage Cellars), you earn four FlyBuys points if you have both the Source and the FlyBuys card. On the Coles card, points are transferred to your FlyBuys account once a quarter and the points last for three years. FlyBuys rewards range from flights and vouchers to wine and smaller treats. You can also earn a four-cent fuel-saver voucher if you spend a minimum of $30 at a Coles group outlet. But you can only earn four fuel-saver vouchers a month.* DEPARTMENT DOLLARSIt's not just the supermarkets that are riding the reward-card wave. Stores such as David Jones and Myer also issue their own credit cards that reward loyal customers. For example the Myer Visa card, provided by GE Money, entitles you to three points for every dollar spent, to use within two years. And if you pay off your card within the 62-day interest-free period you don't get caught by the 19.99 per cent interest rate. Also, there's a relatively low annual fee of $39, which is waived in the first year. In comparison, the recently launched David Jones American Express card earns you four points for every dollar you spend in-store. After 6 months, you earn 11/2 points for every dollar you spend outside of David Jones and two points for every dollar you spend in-store. You can redeem $100 worth of travel for only 15,000 points and your points never expire. There is a higher annual fee of $99 and the interest rate is 20.49 per cent.CANNEX FIVE STAR RATINGS FOR REWARDS CARDSFREQUENT FLYER $24,000*Earth-Qantas Frequent Flyer-AMEXCommonwealth Bank Commonwealth AwardsIMB Limited Card Services RewardsNab Velocity Rewards ProgramFREQUENT FLYER $60,000*AMEX Qantas Frequent Flyer UltimateAMEX Qantas Frequent Flyer PremiumAMEX Membership Rewards Ascent - PlatinumEarth-Qantas Frequent Flyer-AMEXWestpac Membership Rewards Ascent -PlatinumGENERAL REWARDS $12,000*Citibank Silver RewardsWestpac Altitude Rewards - AMEXWestpac Altitude Gold Rewards AMEXWestpac Altitude Platinum Rewards AMEXWestpac Altitude Rewards - MastercardGENERAL REWARDS $24,000*AMEX Membership Rewards AscentAMEX Membership Rewards ChoicesCitibank Silver RewardsMyer VISA (GE Money) Myer One Inside MyerWestpac Altitude Rewards-MastercardGENERAL REWARDS $60,000*AMEX Membership Rewards AscentAMEX Membership Rewards Ascent - PlatinumCitibank Silver RewardsDiners Club Int. Diners Club RewardsMyer VISA (GE Money) Myer One Inside MyerWestpac Altitude Platinum Rewards-AMEXWestpac Altitude Rewards-AMEXWestpac Altitude Gold Rewards-AMEXWestpac Altitude Rewards-MastercardWestpac Altitude Gold Rewards-Mastercard*Annual spend Source: Cannex
© 2008 Sun Herald
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