Are credit card bonus offers worth it?

Published on November 27th, 2020
  Written by 
Bill Tsouvalas
Bill Tsouvalas is the managing director and a key company spokesperson at Savvy. As a personal finance expert, he often shares his insights on a range of topics, being featured on leading news outlets including News Corp publications such as the Daily Telegraph and Herald Sun, Fairfax Media publications such as the Australian Financial Review, the Seven Network and more. Bill has over 15 years of experience working in the finance industry and founded Savvy in 2010 with a vision to provide affordable and accessible finance options to all Australians. He has built Savvy from a small asset finance brokerage into a financial comparison website which now attracts close to 2 million Aussies per year and was included in the BRW’s Fast 100 in 2015 as one of the fastest-growing companies in the country. He’s passionate about helping Australians make financially savvy decisions and reviews content across the brand to ensure its accuracy. You can follow Bill on LinkedIn.
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Credit cards have evolved to offer you more every time you swipe. There is no doubt that credit card providers are stepping up their marketing game by offering cards that come with various rewards and bonuses upon sign up. But are credit card bonus offers worth their salt or is it just another marketing gimmick and feature that will not benefit you much?

What are credit bonus offers?

Credit card bonus offers is what is given to you by your lender whenever you apply for a new credit card and you are approved. These bonus offers come in a form of reward points, cash back or other forms of rewards. You can then use these rewards any way you see fit for eligible purchases such as frequent flyers, to top up at a petrol station, or to buy something at a rewards shop.

A lot of these bonus offers come with strong reward offers that give you good value for your money. Depending on which credit card offer you sign up for you could be rewarded a point or more for each dollar that you spend.

Consider the costs of accessing these offers

There are credit cards that offer amazing bonus offer features. Some offer over 100,000 bonus points upon sign up which can be redeemed as frequent flyer points to board a flight for free. There are also additional perks such as travel insurance, concierge services, and strong point system to the value of 3 points for each dollar spent to spend in any way you want.

However, you need to keep in mind that accessing such rewards usually requires that you spend money which can usually cancel out the benefits of these rewards. Some credit card offers require that you spend between $3,000 and $4,000 to unlock these points, which can be a lot to part with just to access points.

The only way you can make the most of these credit card offers is if the credit card matches your spending habits, making the collection of points a smoother process. It is only reasonable to sign up for a credit card that has points that are useful to you.

Are they worth it?

You might have come across a credit card that offers rewards that you could only dream of, but a question you need to ask yourself is are the points going to be useful to you? There is no point in investing on a credit card that has fancy features that you have to pay for, yet you never use.

If you get a card that offers points that you can redeem to use for whatever eligible purchases they have on offer, but nothing appeals to you then it is best not to get the card.

A rule of thumb on knowing whether something is worth investing in is to way the cost against value. If you find that you are paying more for a value that does not match the price tag, then it is time to step away and look for a better offer. Always keep in mind that whether you plan on using your points or not you will still be paying for it.

Credit card bonus offers should mould to the way that you spend and not the other way around. You should be careful if you find yourself spending more just to unlock points. This could push you into debt. When looking for bonus offers you need to always compare them to get the best deal for the money that you will be paying in annual fees.

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This guide provides general information and does not consider your individual needs, finances or objectives. We do not make any recommendation or suggestion about which product is best for you based on your specific situation and we do not compare all companies in the market, or all products offered by all companies. It’s always important to consider whether professional financial, legal or taxation advice is appropriate for you before choosing or purchasing a financial product.

The content on our website is produced by experts in the field of finance and reviewed as part of our editorial guidelines. We endeavour to keep all information across our site updated with accurate information.

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