In Everyday money on Friday 3rd May, 2019

Travel often? These are the highest-earning frequent flyer cards

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You can help your points collection take off with a linked credit card, but beware the small print. Source: Getty

Those who travel regularly can reply on frequent flyer points to land some sweet benefits, such as priority check-in, lounge access and reduced airfare costs, and many financial services providers partner with airlines to offer attractive deals on credit cards that help users accrue frequent flyer points. But with so many cards on the market, do you know which are the highest earning when it comes to actually getting those points?

Financial comparison site RateCity.com.au has crunched the numbers, though, and revealed which cards offer the biggest bang for your buck if you spend $20,000 a year on your credit card for three consecutive years – which might sound like a large amount until you consider that many people put all of their major purchases, such as holidays and homewares on their credit cards, and even your regular grocery shopping, if put on your credit card, adds up to quite a significant sum over time.

The RateCity research was based on a person who planned to use their points to obtain flights between Sydney and Melbourne, and topping the list was Qantas Money’s Qantas Premier Platinum card, which offers an earn rate of 1 point per dollar spent on all purchases up to $10,000. The card also comes with a sign-up bonus of 100,000 points over the first two years.

Here are the top five:

Qantas Premier Premium

Lender: Qantas Money

Earn rate: 1 point per dollar on every day purchases up to $10,000, 0.5 points thereafter. International purchases reward 1.5 points, and 1 point per dollar on select Qantas products

Sign-up bonus: 70,000 points in the first year and 30,000 in second year

Conditions for bonus points: 70,000 points will be awarded when $3,500 is spent within 90 days of card approval, plus 30,000 points awarded on your first anniversary

Annual fee: $149 in the first year, $299 after that

Interest rate: 19.99 per cent

Estimated gain after three years (based on $20,000 annual spend): $1,913

Virgin Australia Velocity Flyer

Lender: Virgin Money

Earn rate: 0.66 points per dollar up to $1,500 per month, 0.5 thereafter

Sign-up bonus: 75,000 points

Conditions for bonus points: 25,000 points per month, if you spend $1,500 every month in the first three months from approval

Annual fee: $64.50 in first year, then $129

Interest rate: 20.74 per cent

Estimated gain after three years (based on $20,000 annual spend): $1,688

Frequent Flyer Back

Lender: ANZ

Earn rate: 1 point per dollar on the first $7,500 per month, 0.5 points thereafter

Sign-up bonus: 100,000 points and $200 cash back

Conditions for bonus points: You must spend $4,000 on eligible purchases in the first three months from approval

Annual fee: $425

Interest rate: 19.99 per cent

Estimated gain after three years (based on $20,000 annual spend): $1,585

Qantas Ultimate Card

Lender: American Express

Earn rate: 1.25 points per dollar, 2.25 points Qantas products and services, 4.25 points Qantas wine, 0.5 govt bodies. Additional offer of $450 travel credit a year

Sign-up bonus: 100,000

Conditions for bonus points: Available to new card holders only, you must spend $3,000 on eligible purchases within the first three months from approval

Annual fee: $450

Interest rate: 20.74 per cent

Estimated gain after three years (based on $20,000 annual spend): $1,559, plus $450 worth of travel credit

Amplify Signature (Qantas)

Lender: St George/Bank of Melbourne/Bank SA

Earn rate: 0.75 points per dollar

Sign-up bonus: 80,000

Conditions for bonus points: You must spend $4,000 on eligible purchases within 90 days of approval

Annual fee: $179 in first year, then $279

Interest rate: 19.74 per cent

Estimated gain after three years (based on $20,000 annual spend): $1,341 (plus up to 10 per cent bonus points, depending on your birthday)

However, while we all love earning loyalty points, there are some things to keep an eye out for when it comes to choosing a frequent flyer card, such as fees. All of the cards in the top five had ongoing annual fees of at least $129. Interest rates, as with all credit cards, are also worth looking into, as many frequent flyer cards come with high interest rates. Most such cards also come with conditions that you must adhere to in order to accrue points.

That means it’s important not to be enticed into signing up for such a card if you are not someone who flies often, as you will most likely be shelling out cash for no benefit.

Do you have any of these cards? Do you travel by plane often?

Important information: The information provided on this website is of a general nature and for information purposes only. It does not take into account your objectives, financial situation or needs. It is not financial product advice and must not be relied upon as such. Before making any financial decision you should determine whether the information is appropriate in terms of your particular circumstances and seek advice from an independent licensed financial services professional.

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