Yahoo Finance Australia’s five most expensive rewards cards
New data reveals the most expensive rewards cards in Australia, do you own one of them?
According to financial comparison site Mozo, annual fees on reward cards are four times higher than on regular credit cards.
Mozo’s Rewards Revealer tool, which compares 110 rewards cards based on an individual’s spending habits and preferred rewards type, flags Citibank’s Prestige rewards card as the most expensive, costing up to a huge $700 per year in annual fees and a 20.99% purchase rate interest.
Also read: Eight tips for choosing a rewards credit card
The American Express Qantas Ultimate Card came in second place, albeit quite far behind Citibank Prestige, with an annual fee of $450, closely followed by ANZ’s Frequent Flyer Black at $425, and Citibank Signature and Westpac Altitude Black which both charge an annual fee of $395.
The majority of rewards credit cardholders believe rewards programs deliver poor value, and nearly two-thirds would cancel their card if the provider further slashed the value of their program.
“While close to half of Australian adults have a rewards credit card, our survey results show the level of consumer satisfaction is low, with widespread perceptions that these cards deliver poor value,” Mozo director Kirsty Lamont said.
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“The annual fees on rewards cards can go up to a huge $700 and recently we’ve seen card providers slashing the value of rewards programs. It’s no wonder 7 in 10 cardholders say it takes too long to earn anything worthwhile.”
The survey also found that many cardholders are letting their points balance sit idle, with nearly two in five saying they didn’t redeem any points in the previous year, and one in ten saying they have never redeemed any points.
“Consumers who want a more rewarding credit card should do their research and compare the options based on their spending habits,” Lamont said.
“In addition to higher annual fees, the average rewards card interest rate of 19.71% is significantly higher than the the non-rewards average of 14.44%. After these charges, many consumers wouldn’t be breaking even with their points, much less be rewarded.”
Instead, the comparison site reveals the five best non-reward cards which give customers the most value.
Also read: 27 ways you waste your money
ME’s Frank credit card comes out on top with no annual fee and only a 9.99% interest rate.
Heritage Bank’s Gold low rate credit card also has no annual fee and only charges a 11.80% interest rate.
These are closely followed by Qudos Bank’s Lifestyle card, Bank Australia’s Visa credit card and Victoria Teachers Mutual Bank’s Visa classic credit card, all which have zero annual fee and interest rates of 12.34%, 12.89% and 12.94% respectively.
