Analysis of RBA data from Canstar has found over the last five years, the average spend from Australians per account in the traditional ‘Christmas shopping’ months – October, November and December – is about $4,954. This is a lot of money to be spending over a short period, which can result in some Australians acquiring more debt.
In anticipation of the Christmas rush, here is what you might earn on your rewards credit card during the festive season.
A breakdown of credit cards rewards over Christmas
Seeing the numbers puts into perspective just how much of a workout our credit cards get over Christmas. In 2016, RBA data shows $27.69 billion AUD was spent in December, with 239 million purchases made!
The graph above shows just how much these numbers have changed over the last two decades. Comparatively, December 1996 saw $2.6 billion spent for 28 million purchases – nearly 10 times less than now.
Both the number of purchases and the total value of these purchases have steadily increased over the last 20 years, and using this historical data we can estimate what our Christmas spending is likely to be in 2017. Canstar Research has estimated Australians will spend a total of $1,744per account this December, which equates to a total of $29.17billion AUD. If this turns out to be accurate, then this will be $1.47 billion more than last year!
So how could this affect rewards? Using three of Canstar’s 5-Star rated credit cards in the Rewards 24k spend customer profile, we can estimate the dollar value equivalent of rewards that could potentially be earned over December 2017, based on the average spend amounts above.
Table 1. The estimated value of purchases and reward return in the month of October, November and December 2017.
|Year||Total number of accounts*||Predicted value of purchases*||Estimated amount of reward return #|
($ billion AUD)
|Per Account ($AUD)**||Total
($ million AUD)
Figure is based on the total number of accounts as of July 2017. Data sourced as of 09/10/2017.
Based on the figures above, the October-November-December period could see Australians earn an average of roughly:
- $66 in rewards per account for an average of $4,954 spent
- $1.106 billion AU in total (if all accounts earned the same rewards)
While this dollar value may not seem like as much as you’d expect, this represents a 1.33% reward return. Also bear in mind that this dollar value is per account, not per person. It is possible that you could see yourself earning a lot more than this with one of Canstar’s 5-Star Rated Rewards Cards, with a variety of cards available that have favourable earn rates for different consumers. For example, some cards earn bonus points for grocery and department stores while others earn bonus points for restaurants. It pays to know your own spending habits, and as always, shop around for the card that will best suit your needs.
As a guide to how you can maximize your points earning potential over the Christmas period, let’s make the following assumptions:
- The same average spend per person in October-November-December of $4,954, rounded to $5000.
- Your card earns 2 points per dollar on all spending.
- You need 1000 points to redeem $7.41 of cash back.
Based on these figures, Australians could earn $74.10 worth of rewards points in the period leading up to and including Christmas, an increase of nearly 12% from the original scenario. This once again highlights the importance to choose the right card for you.
We calculated this figure using the following Net Reward Return formula:
This doesn’t take into account your specific spending habits, such as hunting for special rewards programs and bonuses, as well as the various fees and charges on certain cards. For example, many of the new signup offers give extra rewards points or free gift cards for making eligible purchases, so your return could be much higher than this. So get out there and find a card that gives a good bang for its buck! The section below can help you with that.
Rewards offers for Christmas
If you want to maximise your reward returns over the festive season, you’d be pleased to know many financial institutions tend to offer attractive deals and promotions in order to get the attention of shoppers. These bonus offers typically include a sizeable amount of free rewards points if you signup and meet certain requirements, such as spending a specific amount in the first few months.
Bear in mind you shouldn’t take out a new credit card just because of a sign-up deal. The costs of owning and using these credit cards should we weighed up against the benefits of the special offer. See our guide on how to choose a credit card rewards program for more info.
For a look at the signup deals currently offered by credit card providers, read our article on the topic here.
These rewards bonuses can come in the form of either Rewards cards or Frequent Flyer cards, and you can compare them both with Canstar:
* Based on year-on-year seasonally adjusted growth rates calculated using ABS Credit and Charge Card Statistics for 2012-2016.
** Figure is calculated through Total Value of Purchases divided by the number of accounts according to the ABS as of July 2017.
# Average Reward Return of three selected 5-star rated credit cards in the $24k Rewards Profile using a scenario of 100% of Christmas spending at major department stores.