Best Rewards Credit Cards for You
When it comes to choosing rewards credit card, there are a few points you may wish to consider if you want to find the best ones.
At first, and most obviously, is the interest rate; second is the fee structure; and finally is how the reward program itself works. The combination of these factors can make a critical difference to your choice.
The first thing you should do is to decide your underlying reason for choosing your rewards card. Are you looking to accumulate frequent flyer points, or are you looking for the best package of rewards from a range of partners instead? You will need to decide this early because the market is dominated by the frequent flyer point rewards, but there are also some that offer you day-to-day rewards if flying points are not your thing.
Most reward cards are based upon the optimum minimum yearly spend.
The starting point for reward systems is a yearly spend of $12,000. There are a few cards recommended by Cannex that will suit consumers in this category but it should be pointed out that in order to obtain any real benefit the cards need to be paid off within the interest free period, which is usually 44 days. Watch out for shorter periods!
The most common yearly spend is $24,000 per year. This is the point at which most programs make joining worthwhile. Lower than this and you may not get your yearly fees worth of rewards. In order to qualify for these cards you will also need to be earning at least $45,000 per annum. This is not the only criteria for obtaining the card however as each lender will assess an application on a case-by-case basis.
Every card has a yearly fee, and points accumulate according to dollars spent. This is where the difference in cards becomes a point of critical assessment for you and you need to be careful in making your decision. Some cards will offer a nil yearly fee option but points will accumulate at a slower rate.
Cards will also offer a range of other incentives which come at no cost. For example, many lenders offer free international travel insurance with their card.
If you spend more than $60,000 per annum then the rewards will change significantly, but you will need to be earning at least $70,000 per year in order to qualify for these programs.
Once again the benefits of these cards are maximised when the monthly balance is paid off within the interest-free period meaning that no interest accrues. This is the only way a comparison can be made because the interest component of the card can eat up the benefits quite substantially if the card is not paid off within the interest-free period.
The best way to look at rewards credit cards is that they are simply a way to get some of your money back. This can include not just frequent flyer points or membership rewards but also cash back where you will be refunded a small percentage, generally 0.5 to 1% of the purchase total every time you use your card.
The benefits, costs and interest rates for these cards are changing all the time so it is best to check with Cannex before you apply, and review your card annually.
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