MORE than seven million Australians get no value from their credit card rewards - about half of all cardholders - because fees wipe out the benefits, research shows.  

Annual credit card fees outweigh the value of any merchandise or flights, according to research from comparison site RateCity.

Cardholders would need to spend about $60,000 to come out on top, the research found.  

Damian Smith, RateCity CEO, said at spend levels of a few thousand dollars per year cardholders get very little value from rewards.

"Only the biggest spenders get any value out of most credit card rewards – and only then if they pay their cards off in full every month, Mr Smith said.

"These cards are really aimed at the high flyers; people who are using them for the corporate expenses and getting them paid off in full every month. Most mums and dads won't be spending $5000 per month on their credit card," he said.  

Cardholders would need to spend around three-and-a-half times the average $17,000 that Australians fork out on credit cards.

"We all feel like we're winning if we can land an airfare or a bit of merchandise. But for the most part those rewards don't stack up to the value of the annual fee.

"If you spent $1000 per month using a typical rewards card you'd get $101 worth of annual rewards but you'd be paying $134 in annual fees. You’d end up $33 behind even if you've paid your card off in full every month and therefore paid no interest.  

In order to get a Sydney-Melbourne return flight on rewards points from your credit card, the average amount you'd have to spend is over $19,500, according to Mr Smith.

Even the best flight rewards credit card would still require you to spend nearly $7000 in order to get the Sydney to Melbourne return flight," he said.  



By comparison, a single return economy Sydney-Melbourne airfare can be purchased for as little as $140.



Frequent flyer card fees range up to $700 per year so the fees alone for most of these cards cost more than a Sydney-Melbourne flight, Mr Smith said.





Don't get sucked into rewards, sit down and do the sums because it won't take long and you could be hundreds of dollars per year better off," he said.

Read more: http://www.news.com.au/money/most-australians-get-no-value-from-credit-card-rewards/story-e6frfmci-1226191323870#ixzz1dKnFWMvg

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Debt is something you can well do without in the light of the economic tsunami that is just about to flatten the western world.

One but, but remember what Andrei said about fly buys?  Fly buy points are good, you can fly for free....that's after you spend hundreds of thousands of dollars on rubbish you didn't need in the first place.

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The ones that if you spend over $100 you get 4 cents a litre off?

Don't you hate that when you only wanted to grab a few things worth about $10, but you have to spend another $90 to get the petrol docket?

Especially when you find out that the 4 cents has been added onto the products when they hit the shelf.

I do quite nicely without a credit card.

Never had one, and don't want one.

As I have never paid fees on my credit card I wouldn't know if Crooks latest rant is factual or not.  I do know that most of our Christmas shopping is paid for by reward points. They work for me.

Ex Dame Pansi wrote on Nov 11^th, 2011 at 9:25am:


What about your SICK LEAVE BLUDGER

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Yep, well that's why you put EVERYTHING you possibly can on the card, and pay it off in full every month.  I wouldn't think the $50 annual fee outweighs a free holiday on frequent flyer points every year.