The truth about frequent flyer cards

AN independent analysis of Australian frequent flyer credit cards has revealed that, on an average spend, it can take up to nine years to earn a one-way trip to London.

Increasingly, pervasive credit card surcharges from retailers, airline taxes and annual fees are also destroying any points earned.

Leading comparison website WhistleOut has analysed points earned on 29 cards linked to the frequent flyer programs of Qantas, Emirates, Singapore Airlines and Virgin Australia (Velocity) against the average Australian credit card spend of $1,146 per month. Importantly the research used the actual points required for a trip to London in the four frequent flyer programs.

Just nine out of the 29 cards analysed would take less than three years to accumulate enough points for a single person to fly one way to London. The majority of cards take consumers more than three years with some cards taking nine years for an average consumer. The total spends required varied from $42,673 to $130,000-plus across the cards. 

However, with average credit card annual fees, retailer surcharge fees and airline taxes, it means consumers will see an actual average cost of $1,613 on these airline cards in earning their flight reward to London. The biggest red flag for consumers this year is the 1-3% extra surcharge on the use of credit cards from one third of retailers, a practice that was banned until 2003.

The RBA is now reviewing the practice. Surcharges mean an average of $392.52 in costs on the required points for a trip to London.

Director of WhistleOut, Cameron Craig, said: “Frequent flyer points are the most advertised feature on new credit cards, yet their benefit is very subjective. A spend of fifteen thousand dollars per year is not going to bring you miracles on the average card. We found some standout cards contrasted by some terrible performances on the entry level cards.”

“Between cards, the difference in points earning potential and cost to you is huge. You’ve just got to review them against your spending. On a low spend, you’re hardly going to London,” he says.

To compare credit cards, visit WhistleOut website.

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