What's on offer for Frequent Flyer credit cards?

Find out what rates and features are on offer for Frequent Flyer credit cards in 2016, with the latest research from Canstar.

This year, Canstar has researched and rated 74 frequent flyer credit cards from 20 financial institutions. We’ve scoured the market to find the best rates, features, and rewards programs on offer in 2016 for Frequent Flyer credit cards.

Why get a Frequent Flyer credit card?

If you are looking for a new credit card, a Frequent Flyer card might suit you if some of these apply:

  • You pay your closing credit card balance in full each month (interest rates on frequent flyer credit cards are often around 20% p.a.).
  • You want to earn points to redeem for flights (whether domestic or international)
  • You are already a member of a frequent flyer scheme and want to boost your points balance (e.g. Qantas Frequent Flyer or Virgin Australia’s Velocity program).

A frequent flyer credit card may not be for you if:

  • You rarely pay off your balance in full or only use your credit card occasionally.
  • You want to redeem your points for cashback, gift cards, or shopping vouchers.
  • You want benefits such as travel insurance but aren’t particularly interested in earning points that you will never redeem.

What’s new with Frequent Flyer credit cards?

Since the last time Canstar took a look at Frequent Flyer credit cards, there is a new kid on the block – flybuys, the loyalty program owned and run by Wesfarmers, with retailers Coles, Kmart, and Target being the major participants in the program.

But why was flybuys not a frequent flyer program before? After all, the word “fly” is in the name…

The reason that Canstar has previously not considered flybuys as a frequent flyer program was that while points could be redeemed for flights (through Webjet.com, and now flybuys travel) there were no fixed rate reward redemption rates on flights. Put simply, it was like redeeming points for cash, and then using the cash to buy a ticket.

The major changed that has happened since then is that flybuys points can now be turned into Etihad Guest Miles at a rate of 2.5 flybuys points for 1 Etihad Guest Miles.

Apart from being able to be used to book flights with the Abu Dhabi based carried directly, Etihad Guest Miles can be used to book flights on Virgin Australia through their contact centre (and with 14 days’ notice).

For a one-way ticket between Sydney and Melbourne, 6,900 Guest Miles would be required plus the payment of around $21 in taxes. This equates to 17,250 flybuys points. The same flight (if being sold for $99) would cost 19,800 flybuys points when redeemed through flybuys travel. The cost of the flight could go up though, or a reward flight through Eithad may not always be available – so to know whether you get better value redeeming through Etihad or flybuys travel you would need to check rates with both.

flybuys points can be earned on four credit cards issued by Wesfarmers Finance (until recently, half-owned by GE Capital), and one by NAB:

  • Coles – Low Rate MasterCard (only earns points on purchases at Coles Supermarkets)
  • Coles – No Annual Fee MasterCard
  • Coles – Rewards MasterCard
  • NAB – flybuys Rewards Card

What is on offer for Frequent Flyer credit cards?

The average annual fee on a frequent flyer credit is $208, but the value that you get back in flights will depend on how much you spend on the card. The table below shows what average return in flights (measured in dollars) you can expect to get at different levels of annual spending.  Whilst on average, you would be worse off if you only spent $12,000 per year on a card, or slightly better off if you spent $24,000, these figures represent averages – selecting a five star product could mean a huge difference in the final outcome!

Annual Spending Average Flight Return
$12,000 $157
$24,000 $281
$60,000 $603
$120,000 $1089
Source: www.canstar.com.au

Remember that rewards cards don’t suit everyone, and also remember that Canstar is an information provider and in giving you product information Canstar is not making any suggestion or recommendation about a particular credit product. If you decided to apply for a credit card, you will deal directly with a financial institution, and not with Canstar. Rates and product information should be confirmed with the relevant financial institution. For more information, read our detailed disclosure, important notes and additional information.

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