4 things you may not know about reward points

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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, updated on March 10th, 2021       

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Things you need to know about credit card rewards cards

Frequent flyer programs come with many perks that make travelling convenient. With most programs boasting a wide range of ways to earn points, it is vital to compare which program will give you the best value for money. These are the 4 factors that are critical when comparing reward points in a reward program.

Check if your points come with an expiration date

Having a frequent flyer card that boasts a great deal of being able to gain a large sum of bonus points that can be redeemed in more than one way can mean nothing if you only realise once it is too late that your points come with an expiration date. This could leave you with little to no time to redeem your points which can be a waste.

Before joining a frequent flyer or reward program it is important to check if your points come with an expiration date. This will vary from program to program. Therefore, comparing your options can reveal the most suitable option for you.

Some frequent flyer programs set the expiration dates ranging from 18 months, 24 months and 3 years at most. This means that if you do not redeem your points during this time frame they will expire (https://www.finder.com.au/frequent-flyer ).

Know the point value of your card

The value of points will depend on which credit card you own. This could be anything from 0.5 points for every $1 spent up to 2 points for every $1 spent. There is also a spend requirement that is generally required in order to unlock these points which is why it is vital to check if the spending requirements are suitable for your spending habits. The way you choose to redeem your points also vary in value based on what you are redeeming it for. You will find that you are able to get the most value for your points by redeeming it through flights than spending it on the ground. Therefore, checking the terms that come with your reward program is essential.

Beware of point caps

This may appear to be a limiting feature that some reward cards and frequent flyer programs have. A point cap basically means that you are only able to earn a certain amount of points. This basically means that you are able to earn a certain amount of points for your monthly or annual spending. Anything beyond this can mean a waste of your finances as you won’t be able to gain points for it.

Read the fine print when it comes to bonus point offers

There are many cards on the market that boast huge bonus points offers that can be enticing. However, before you take out a card due to such features check the fine print. There could be a hefty annual fee or spend requirement that is attached to it that can cancel the overall value of the points. You could find yourself overextending yourself and your budget trying to unlock the bonus point offer.

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