Mastering Loyalty Cards

Loyalty cards could earn you an effortless discount – if used wisely.

If used wisely, loyalty cards can deliver benefits. But before rushing out and joining a million different schemes, do your homework and find a scheme that best matches your spending habits. Whether you start paying all your bills with your credit card, or you simply make sure you get a stamp every time you buy a juice, in the end, says Garfield Wright, an analyst at financial research company Cannex, “it all adds up”.

Show me the money

When applying for a credit card, 39% of Australians chose their card because of the benefits on offer from its loyalty programme. Why? Because Australians like to use their rewards points for free flights, shopping vouchers and gifts. So how do the credit card and other popular loyalty schemes compare?

National Australia Bank/FlyBuys credit card.

One point for every $1 spent using the credit card and 10,000 flybuys bonus points. Ideal for those who put everything on their credit card but have nil balance at the end of month.

Coles Rewards Mastercard credit card.

Mastercard and Flybuys card in one. 2 points per $1 you spend everywhere. Can also save up to 8c per litre on petrol through Shell stations.

Earth American Express credit card.

One Qantas frequent flyer point for every $1 spent. Earn an extra point for every $1 spent on Qantas services as well as free Qantas Frequent Flyer membership – an instant $82.50 saving. Points are automatically transferred to the Qantas programme and you’ll enjoy a reduced interest rate for Qantas products over $500 Commonwealth Awards credit cards. Two points per $1 spent at selected bonus partners.
Bank of Queensland Q Rewards credit card programme.
Free membership and 1 point for each $1 spent for the Blue Visa Card and 2 points for each $1 spent for the Platinum Visa card.
Velocity credit cards.
Earn five points for every $1 spent on Virgin Blue flights. The best deal in the travel category of loyalty programmes, with the added benefit of no expiry date of accrued points.
BankWest More credit cards.
Earn up to 2 points per $1 if you spend on eligble purchases. Then you can book domestic or international flights directly with Flight Centre, on the airline of your choice.
The Facts about Frequent Flyers
Frequent Flyers is a reward scheme that has its critics, despite having more than five million members in Australia. A “free” trip isn’t exactly what you’re getting since surcharges, such as fuel levies, aren’t included. A Qantas flight from Sydney to Brisbane uses 16,000 frequent flyer points, but you’ll still have to spend about $100 on levies. You’ll also be limited in your choice of flights. But buying a Sydney to Brisbane flight outright costs about $200, including surcharges, so why redeem the points?

According to Clifford Reichlin, founder of the independent consumer site, it’s best to use your points to fly internationally or to domestic destinations such as Alice Springs, where discounted fares aren’t always available. “It’s still not free, because you’ll still pay charges,” he says, “but if you don’t have a lot of points, it’s the better deal.”

Many credit cards are linked specifically to frequent flyer programmes. Seven different cards have been launched in the past year, such as the Velocity NAB card (linked with Virgin Blue) and Westpac’s Earth card (linked to Qantas). “There are still consumers who want free flights instead of other rewards,” says Wright. “These cards cater to that.”
Go online and save
What if you’re one of those shoppers who never pays off your balance, but you still want to join a rewards programme? Online reward programmes have been running for a number of years.

Companies such as EmailCash, RewardsOnline and Dynamic Rewards direct their customers to join up on their sites, to earn points by filling in surveys and buying products and services online through their partners, such as travel store and online department store Any points accrued can then be converted to cash or gift vouchers.

Most online reward partners offer one point for $1 spent, with others offering more generous points or bonus offers, although it will take a fair number of points for significant rewards. A $30 cash reward will usually need about 3100 points. But with no joining fee or ongoing fees, a patient and disciplined shopper could reap rewards – especially if you’re regularly buying bigger-ticket items.