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Credit Card Rewards

What is a credit card reward?

Canstar Outstanding Value credit card

Rewards credit cards give you extra benefits that you earn according to how much money you spend on your credit card. The lender converts your spending into rewards points, and when you redeem those points, the lender converts them into rewards for you.

There are four main types of rewards, discussed in detail below: cash back, frequent flyer, merchandise, and instant discounts at point of sale.

How do credit card rewards work?

Depending on the rewards program you choose, you can earn rewards points for each dollar you spend on the card. Check whether the card caps (limits) the amount of rewards points you can earn, whether the rewards points can expire before you redeem them, and whether it is easy to redeem the points for the rewards you value.

Some lenders allow you to set up auto-redemption, so that every time you reach a certain number of points, they are automatically redeemed in the method of your choice.

What are the main types of credit card rewards?

There are four main types of credit card rewards:

  • Cash back: These rewards suit customers looking for cash back or gift cards.
  • Merchandise (general rewards)These rewards suit customers looking for a choice of options when redeeming points, such as merchandise, gift cards, automotive, entertainment, lifestyle, food and beverage, or additional rewards.
  • Frequent flyer (flight rewards): These rewards suit customers looking for flights or other travel products.
  • Instant rewards: These rewards suit customers looking for an instant discount at the point of sale.

Compare Credit Card Rewards

Written by: TJ Ryan

How you can compare credit card rewards

When you’re looking at the different cards available, the “best” rewards program comes down to a few factors:

  • Does this rewards program suit my credit card usage habits?
  • Does the rewards program offer rewards that I am interested in?
  • Are there any costs associated with being a member of the rewards program?
  • How many points do I earn for every $1 I spend, and what are these points worth?
  • Is the annual fee for the card worth the amount of rewards I can earn?

Once you know the answers to these questions, CANSTAR can help you narrow the field down from more than 100 Rewards credit cards down to just the cards that could meet your needs. Simply use the comparison selector tool at the top of this page and you can see a comparison of Rewards credit cards:

Compare Credit Cards With Rewards

How CANSTAR compares credit card rewards

Every year, we research and rate more than 100 Rewards credit cards available in Australia from different lenders, according to the value of rewards they offered to spenders at different levels.

We analyse the value of four types of rewards (cash back, frequent flyer, instant rewards, and merchandise) offered for four different levels of yearly spending by a cardholder:

  1. $12,000/year
  2. $24,000/year
  3. $60,000/year
  4. $120,000/year

You can read about our full ratings process in the Methodology of our latest Credit Card Rewards Star Ratings report.

Compare Credit Card Rewards

Rewards Credit Card Glossary of Terms

Please note that these are a general explanation of the meaning of terms used in relation to credit card rewards.

Your bank or financial institution may use different terms, and you should read the terms and conditions of your credit card carefully to understand all rewards, features, fees and charges, and interest rates that may apply to your card.

You cannot rely on these terms when buying a credit card. Refer to the product disclosure statement (PDS) for the credit card you are considering and CANSTAR’s Financial Services and Credit Guide (FSCG).

Annual fee: A fee charged annually for the use of the credit card, to cover the administration costs of the line of credit.

Auto-redemption: A system you can set up with your provider where every time you reach a certain number of points, they are automatically redeemed in the method of your choice.

Cash advance: Withdrawing cash from a line of credit, by using your credit card to get cash out from an ATM, buy foreign currency, buy traveller’s cheques, or pay a gambling debt. Usually incurs a cash advance fee and/or a higher interest rate.

Credit limit: The maximum amount you can spend using your credit card before having to pay off some of the balance. Find out how credit limits are determined.

Credit report or credit history: A report from a credit agency that contains a history of your payments on current and previous credit cards and loans. Lenders use your credit report to decide how likely you are to repay a future debt and whether or not to lend money to you. Find out what is included in your credit report.

Credit rating or credit score: A numerical score that represents your credit-worthiness, based on your credit repayment history. The score is based on whether you pay your bills on time, your current level of debt, the types of credit and loans you have, and the length of your credit history. Your credit rating is used by lenders when deciding whether or not to lend money to you. Find out how to check your credit rating.

Default: When a cardholder fails to make the minimum required payment on their credit card bill, loan, or other line of credit. Defaults are a serious black mark on your credit report and negatively affect your credit rating.

Interest rate: The rate at which your outstanding balance increases per month if your bill is not paid in full. Learn about how interest is calculated.

Interest-free days: The number of days you have to pay your bill in full before interest is charged on the outstanding balance. It is the period of time between the date of a purchase and when the payment is due. Learn about how interest-free days are calculated.

Introductory rate: An initial interest rate offered to entice new cardholders to sign up for a credit card. These rates usually begin low but revert to the standard rates after 6 months or so. Learn about introductory rates.

Minimum interest charge: The minimum amount of interest you would be charged if you are charged any interest. For example, if your total interest charge is $0.75 but the bank’s minimum interest charge is $1.00, you will be charged $1.00.

Minimum payment: The amount listed on your bill as the minimum your bank requires you to pay off your credit card balance for that month.

Pre-approval: An initial notification that a customer is likely to be approved for a certain credit limit if they apply for that type of credit card. This is based on the information the bank has about their credit history (as opposed to their official credit report), so it does not guarantee the customer will actually be approved if they apply.

Rewards: Benefits that come from using a rewards credit card, in proportion to the amount of money spent. Rewards come in four main types: cash back, frequent flyer miles, merchandise (gift cards or general merchandise), and instant rewards (shopping discounts).

Who offers credit card rewards in Australia?

Rewards Credit Cards

As of March 2017, CANSTAR researches and rates the following providers of Rewards Credit Cards:

  1. American Express
  2. ANZ
  3. Auswide Bank
  4. Bank of Melbourne
  5. Bank of Sydney
  6. BankSA
  7. BankVic
  8. Bankwest
  9. bcu
  10. Bendigo Bank
  11. Big Sky Building Society
  12. BOQ (Bank of Queensland)
  13. Citi
  14. Coles
  15. Commonwealth Bank
  16. CUA
  17. Diners Club
  18. First Option Credit Union
  19. HSBC
  20. IMB Bank
  21. Latitude Financial Services
  22. Macquarie Bank
  23. Myer
  24. MyState
  25. nab
  26. QBANK
  27. QT Mutual Bank
  28. Queenslanders Credit Union
  29. St.George Bank
  30. Summerland
  31. Suncorp Bank
  32. Westpac
  33. Woolworths Money

Compare Credit Card Rewards

Frequent Flyer Rewards Credit Cards

As of March 2017, CANSTAR researches and rates the following providers of Frequent Flyer Rewards Credit Cards:

  1. American Express
  2. ANZ
  3. Auswide Bank
  4. Bank Australia (formerly bankmecu)
  5. Bank of Melbourne
  6. BankSA
  7. Bankwest
  8. BOQ (Bank of Queensland)
  9. Citi
  10. Coles
  11. Commonwealth Bank
  12. Diners Club
  13. G&C Mutual Bank
  14. HSBC
  15. IMB Bank
  16. Macquarie Bank
  17. MyState
  18. nab
  19. QT Mutual Bank
  20. Qudos Bank
  21. Queenslanders Credit Union
  22. St.George Bank
  23. Suncorp Bank
  24. Virgin Money
  25. Westpac
  26. Woolworths Money

Compare Credit Card Rewards