What Are Reward Credit Cards?

Introduction to Reward Credit Cards

Reward credit cards are a type of credit card that allows you to earn reward points or frequent flyer points on your everyday spending. Unlike traditional credit cards, these cards provide additional value by giving you something back every time you make a purchase.

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How Reward Credit Cards Work

1. Types of Reward Points

   When you earn points in Australia, you'll typically earn one of two types:

   • Bank Reward Points:

     • Issued directly by banks
     • Examples: CommBank Rewards Points, Amex Rewards Points, Citi Rewards Points

   • Frequent Flyer Points:

     • Directly linked to two specific frequent flyer programs:
       1. Qantas Points (Qantas Frequent Flyer)
       2. Velocity Points (Virgin Australia)
     • Earned directly through frequent flyer program-branded credit cards
     • Typically named with the bank and frequent flyer program
       • Examples: NAB Qantas Rewards Signature Card
       • Always include the frequent flyer program name in the card title

2. Point Usage Differences

   Depending on how you want to use your points, you can decide which type of point scheme suits your needs best. Frequent flyer points are ideal for those who prioritize travel, while bank reward points offer more flexibility with various redemption options.

   Frequent Flyer Points:

   • Primary purpose: Booking flights
   • Secondary uses:
     • Hotel bookings
     • Miscellaneous travel purchases

   Bank Reward Points:

   • Multiple redemption options:
     1. Purchase gift cards
        • Coles, Woolworths, Bunnings
        • Various retail and store gift cards
     2. Transfer to frequent flyer programs
        • Transfer to KrisFlyer (Singapore Airlines)
        • Transfer to Velocity (Virgin)
        • Limited transfer to Qantas (only with select cards like CommBank and American Express)
     3. Typical transfer rates
        • Example: 2 American Express points = 1 Velocity point
        • Rates vary by bank and program

3. Where Do My Points Live?

   Where your points are stored is different for the different types of point schemes:

   Bank Reward Points:

   • Stored directly in your bank account
   • Visible in your online banking platform
   • Examples:
     • CommBank Rewards Points appear in your CommBank account
     • Amex Rewards Points in your American Express account
     • Citi Rewards Points in your Citi account

   Frequent Flyer Points:

   • Stored in your specific frequent flyer account
   • Not tied to the credit card itself, but earned through the card
   • Examples:
     • Westpac Qantas Points Card: Points stored in Qantas Frequent Flyer account
     • ANZ Velocity Card: Points stored in Velocity account
   • Points can be viewed in your frequent flyer program's online portal

Conclusion

Reward credit cards provide an opportunity to earn points through your everyday spending. These points can be used for various purposes, including travel, gift cards, and other redemption options.

Points accumulate with each purchase and can be a way to get additional value from your regular transactions.