Collecting frequent flyer points is a lucrative game for millions of Aussie travellers, and credit cards offer the biggest points-earning potential.

A rewards card with a sign-on bonus can easily deliver a dozen flights between capital cities in the first year or an international trip anywhere.

But working out the right card for you is tricky because of each product’s fees, points-earning power and sign-on bonuses, plus your own airline preferences.

There is one golden rule: If you’re not going to repay the card debt within its interest-free period, don’t bother getting the card because interest costs and fees will outweigh any frequent flyer benefits.

If you control your debt, the sky’s the limit.

FEES

Reward cards charge higher fees than for other credit cards, often hundreds of dollars a year.

The founder of thechampagnemile.com.au, Adele Eliseo, said people should assess whether membership perks justified the annual fee.

Some cards offset the cost of the fee with annual benefits.

“As an example, the Qantas American Express Ultimate card comes with a $450 annual fee,” Ms Eliseo said.

“However, it delivers a $450 Qantas travel credit and two Qantas Club lounge entries each membership year. So, by using the included benefits, cardholders can essentially offset the cost of holding the card each year.”

SIGN-ON BONUSES

Ms Eliseo said a good card for sign-on bonuses right now was the Qantas Money Premier Platinum Card, offering 120,000 points and a reduced $199 fee for the first year.

“A minimum spend of $1500 is required each month for 6 months to obtain the sign on bonus,” she said.

Point Hacks spokesman Daniel Sciberras said sign-on bonuses changed frequently and several providers now offered 100,000-plus points – including the ANZ Frequent Flyer Black Card and the American Express Westpac Altitude Black bundle.

“Also, financial providers are beginning to stagger bonus points so that you earn a large chunk in the first year, and the remaining portion after the first year, to encourage card members to hold onto their cards longer,” he said.

RateCity research director Sally Tindall said chasing sign-on bonuses with different cards might seem appealing but it had the potential to tarnish your credit history.

“Every time you apply for credit it’s recorded on your credit file and can lead to a reduction in your credit score,” she said.

EARNING POINTS

Make sure your card provider isn’t stingy when delivering points, and Ms Tindall said you should watch out for prickly terms and conditions.

“Some cards have a cap on how many points you can earn, while others give you less points for shopping at certain stores,” she said.

Mr Sciberras said choose a card linked to an airline you used regularly.

“If you are looking to hold a card permanently, then look for one with a high earn rate, as some cards will earn as little as 0.2 points per dollar, while others earn in excess of 1 point per dollar,” he said.

CARDS TO CONSIDER

FOR POINTS AND PERKS:

Qantas American Express Ultimate Card

(Earn 1.25 Qantas points per $1 spent – 0.5 for government and 2.25 for Qantas products – plus 55,000 bonus points for spending $3000 in first 3 months; 4 airport lounge passes per year; annual fee of $450 is offset by $450 Qantas travel credit; interest rate 20.74%)

American Express Velocity Platinum Card

(Earn 1.25 Velocity points per $1 spent – 0.5 for government and 2.25 for Virgin products – plus 50,000 bonus points for spending $3000 in first 3 months. One complimentary Virgin return flight per year; 4 airport lounge passes per year; Annual fee is $375 and interest rate is 20.74%)

ANZ Rewards Travel Adventure Card

(Earn up to 75,000 Velocity points in first three months; free return economy Virgin flight; 2 Virgin lounge invitations annually; earn 1.5 Velocity points per $1 spent up to $2000 per statement period, then 0.5 points thereafter; annual fee of $225 and interest rate of 20.24%)

FOR SIGN-ON BONUSES:

Qantas Money Premier Platinum Card

(Earn up to 120,000 Qantas points – 20,000 per month – by spending $1500 per month, 2 free Qantas Club invitations per year, 1 point per 1$ spend up to $10,000/month, then 0.5 per thereafter. Fee is $199 in first year then $299, rate is 19.99%)

ANZ Frequent Flyer Black Card

(Earn up to 100,000 Qantas points by spending $4000 in first 3 months; 2 free Qantas Club invitations and club discounts; earn 1 Qantas point per $1 spent up to $7500 per statement period then 0.5 thereafter; annual fee is $425, rate is 20.24%))

American Express Westpac Altitude Black bundle

(Earn up to 100,000 Velocity points by spending $4000 in 3 months, 4 airport lounge passes each year, earn 1.25 Velocity points per $1 spent on Amex and 0.75 Velocity points per $1 spent on MasterCard; annual card fees $449, interest rates up to 20.49%)

Source: Point Hacks, thechampagnemile.com.au, RateCity

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