Things worth knowing about Rewards Credit Cards

Cash Reward Credit Cards

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What are Reward Credit Cards?

Rewards credit cards are becoming increasingly popular. Most banks offer a points programme to customers to reward them for using their credit cards. Some of the rewards offered in New Zealand include Fly Buys Points, Airpoints Dollars, Platinum Rewards Points, cash back and more.

Why do people choose Rewards Credit Cards?

Using a rewards card properly can earn you hundreds of dollars in rewards including vouchers, merchandise and cash rewards. Many people now choose their credit card based on the rewards the expect to receive from using the credit card. Knowing what rewards the credit card offers and knowing if it’s the right fit for you will ensure you maximise the rewards offered.

What Rewards Programmes are available in New Zealand?

In New Zealand, there are many different reward programmes that are tailored to fit different kinds of consumer types. For example, the three main credit card reward programmes are focused around frequent flyers, shopping and instant rewards.

A word of caution:

Do not rush to choose a reward programme just because it sounds good because reward programmes are not cheap, and not using it properly could mean you ends up paying more in fees than you get back in rewards. You will need to determine what your needs are and try to find a credit card rewards programme that would fulfill that need without costing you too much.

Rewards credit cards expect you to spend a certain amount before you can earn rewards so check the required spending amount to make sure you will be spending that amount to qualify and choose the right reward based on your expected spending. Websites exist such as ours Credit Cards Compare NZ that let you compare rewards and spending amounts to determine the best rewards credit card for you.

Watch out for those annual fees

Most rewards credit cards also have high annual fees, this is to compensate for all the rewards you are expected to earn. The banks benefit when you pay more in annual fees than you earn in rewards. Ensure that your expected spending will result in rewards higher than the annual fees, if not choose one with lower annual fees even if the card offers no rewards.

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