Credit card loyalty schemes not worth it for most of us

[Hvr]

At a time when many shoppers are turning away from credit cards, banks are devising ever more ways to get us spending on plastic. But near the top of their list of tricks is an old favourite - the credit card loyalty scheme.


Often called gold or platinum schemes, these are designed to make shoppers feel special by allowing them to earn points, which can be cashed in for some sort of reward.

Read more: Credit card loyalty schemes not worth it for most of us
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And the AFF demographic is probably unique in that most of us do evaluate the risks and rewards of these schemes.

According to Canstar, which analysed 128 programs, a shopper has to spend an average of $19,480 on a credit card to earn a $100 voucher. It's a far cry from a decade ago, when $12,400 was required to get a $100 voucher. All the same, they can still be worthwhile, for the right type of shopper.

I'd like to think that I can get more value from 19,480 QFF points than $100 and there are of course even better earn rates.

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[burmans]

And the AFF demographic is probably unique in that most of us do evaluate the risks and rewards of these schemes.



I'd like to think that I can get more value from 19,480 QFF points than $100 and there are of course even better earn rates.

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Yes. I agree with the basic thesis for many people loyalty schemes are not worth it, they are provided by card issues to benefit themselves not consumers. But as educated consumers this does not mean we cant turn the tables!

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[casanovawa]

Unfortunately most people aren't very savvy in terms of managing their basic money or making it work for them, let alone figuring out how to make these schemes work for them instead of the banks...

For a start if you have some semblance of self control, a credit card on its own can be an effective tool to manage your monthly living expenses on the card while having your actual cash either in a high interest account or sitting in your mortgage saving you interest and only sweeping it across monthly before the interest free period in the card ends... I know people i've told about opening a new credit card and the points bonus that comes with it, and they've said they couldn't trust themselves with another credit card, these are the customers the banks love...

Once you already have the bonus of cash management, then your probably already replacing as much cash spend as possible with card spend which effectively means your mostly not spending (or buying) anything extra to get the points, so they're all gravy anyway... And as long as you average out that your not spending more than roughly 1 cent a point and redeeming smartly as the AFF community mostly do then its a double win... I do sometimes think that people on these forums (maybe some of the new ones) might get caught up in the banks game of chasing points thing without actually soberly working out if its actually good value, although they typcially are redeeming for premium awards that they might pay cash for so they have quite a bit of leeway in terms of how much some of the points/$ end up costing them...

 

[harvyk]

I'd like to think that I can get more value from 19,480 QFF points than $100 and there are of course even better earn rates.

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I know I can get more than $100 of value out of 19,480 points. My best effort has been somewhere in the vicinity of $2,000 out of 20,000 points, and I'm sure there are people who have done better.

Of course, I don't sign up to just anything and I do at least 15 minutes of research prior to pressing the buy now button. I am also not afraid of moving my trip around to suit best use of points times. Thanks to doing that I've managed to get more value out of my QFF points than a friend of mine who has 10 times the points balance that I do (and who is extremely unsure of how to use them, I have directed them onto AFF, but I don't know if they joined)...