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Ranked: The five major rewards cards

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Rewards cards are a popular strategy to rustle up some extra cash in the lead up to Christmas.

However, which cards are best to have in your wallet to reap the best rewards?

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The average rewards cardholder with a major bank needs to spend $23,295 to receive a $100 gift card, new research from Mozo reveals.

Whereas cardholders with Amex only need to spend $13,264 to receive a $100 gift card.

Source: Mozo

Similarly, Amex cardholders only had to spend $7,017 to receive a Sydney to Melbourne one-way flight, while the average among the major banks was $13,727.

Source: Mozo

“For rewards cardholders looking to maximise their points earning potential, standalone American Express cards will still be among the highest earners in the market,” Mozo director Kirsty Lamont.

Big changes to rewards cards

Although it’s sitting pretty at the top, Amex users have suffered a 27 per cent drop in the average value their rewards card nets.

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However, they’re not alone. Rewards cardholders with all major banks have seen steep falls in value following new regulation capping the fees merchants charge on credit card payments.

The capping of these fees, known as interchange fees, in 2017 was good news when it came to credit card surcharges but bad news for rewards programs, which were largely funded by these fees.

“There has been a lot of change in the rewards credit card market this year and with Amex now signalling an overhaul of its program, many people will be wondering how best to extract value from their card,” Lamont said.

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“While Amex card holders will see a decline in the value of the points they can earn from April next year, the good news our analysis shows their cards will still outperform the big four banks when it comes to delivering gift cards and flights.”

Source: Mozo

“Although these are quite significant changes, it’s clear Amex still offers one of the best value rewards cards when compared to the big four banks. So if you love rewards, it’s worth doing your research to understand how much you’ll now have to spend on your card to earn a gift card or a flight.”

Earlier research performed by Mozo found the average fee on a rewards card is $182 – nearly four times the fee on the average card.

“The message for cardholders is clear – if you aren’t a big spender, it’s time to review the value your rewards card is really delivering,” Lamont said.

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