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Published November 13, 2023
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How Do Credit Card Rewards And Loyalty Programs Work?

Your credit card can be more than a revolving line of credit. Earn rewards for everyday usage.

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Consumers today expect credit card rewards that add real financial value. For savvy consumers, a credit card is a dynamic financial product with multiple benefits. Beyond the financial flexibility it provides, a credit card can offer access to discounts from partner brands, travel insurance or rewards that save money. 

Each provider has its own rewards and loyalty programs where you earn points by using the card, though they all function in a similar way. Some providers also offer more than one card, each with their own features. Generally, the higher the rewards, the more sophisticated the card, though for first-time credit card holders, rewards aren’t necessarily a priority. 

» MORE: Types of credit cards in Australia

What are credit card rewards programs? 

Credit card rewards offer plenty of benefits, yet understanding how they work can be overwhelming because there’s no one industry-wide program. Rewards differ depending on the provider and the product, and offers are constantly changing, with different timeframes for sign-up rewards to attract new customers. This is why it’s a good idea to review your card’s rewards program every year and shop around to see if you’re getting the best possible rewards for your lifestyle and priorities. 

The main types of credit cards rewards are; 

  • Store and retail rewards 
  • Travel points 
  • Cashback 
  • Gift cards 

The Westpac Rewards program, for example, offers Altitude Points, which can be turned into frequent flyer points, store and retail discounts, cashback and gift cards. 

Bank-brand partnerships allow you to earn points to use on these brands every time you use the credit card and when you make purchases directly with these brands. 

So, who pays for the rewards? These programs are funded by fees and the interest generated by credit cards. So as a consumer, you should only take on a credit card that you can confidently pay down each month and that balances the fees with the potential rewards. 

» MORE: 9 things to know before getting your first credit card

The different types of credit card rewards programs 

There are two main types of credit card reward programs: exclusive programs and co-branded programs. Reflecting on what you need from a credit card, the brands you shop with, and your airline of preference can help you decide which card to choose. You might go directly to Qantas affiliated credit cards if building travel points is a priority. For most consumers, researching credit card products by the big banks is a good place to start. 

Rewards programs offered by providers 

Most banks categorise credit cards by rewards, low interest, low fees and special offers. Banks have their own loyalty programs such as the Westpac Altitude Rewards, CommBank Awards, and ANZ Rewards. These rewards cards are separate to the co-branded products and offer a broader range of benefits. 

The ANZ Rewards Black credit card is one example and comes with both introductory points (180,000) and a program where you earn 2 points for every dollar you spend. Use the points you accrue with retail and travel partners in the ANZ rewards store, as cash back or through gift cards. 

Loyalty programs offered with co-branded credit cards 

Banks also offer co-branded credit cards, usually with airlines and supermarkets. Keeping with the ANZ example, there are multiple ANZ-Qantas credit cards. The ANZ Frequent Flyer Black card comes with 100,000 bonus Qantas points and 1 point for every dollar you spend up to and including $7,500. You can redeem these frequent flyer points on flights and travel upgrades. 

When deciding which is right for you – a standard rewards card or co-branded card – consider the brands you like, how often you travel, who you fly with, and where you can translate points into savings on everyday purchases. 

» MORE: What is a no-annual-fee credit card?

Popular credit card and loyalty programs in Australia 

The big four 

  1. CommBank Awards 
  2. Westpac Altitude Rewards 
  3. ANZ Rewards 
  4. NAB Rewards

Other notable rewards programs include: American Express Membership Rewards, Qantas Frequent Flyer, Velocity Frequent Flyer, Citi Rewards, Coles Flybuys, and Woolworths Everyday Rewards. 

Smaller banks 

  • ING Orange One Rewards 
  • Suncorp Rewards – connected to Kogan and Flybuys  
  • Bankwest Rewards 
  • Bendigo Bank Rewards 
  • Bank of Queensland Rewards 
  • Bank of Melbourne Amplify Rewards 
  • St. George Bank Amplify Rewards. 

A caveat: Consumers new to rewards credit cards might be disappointed by how long it takes to accrue points and see tangible benefits. Especially because banks regularly change their product offerings. 

When it comes to reward cards, it’s best to have a realistic view about how much you can accrue on a weekly or monthly basis. You’re likely going to see the biggest benefits with the welcome offer points and the add-ons such as the complimentary insurance and airline lounge passes (which can add up to hundreds or thousands in savings per year). 

» MORE: How to apply for a credit card in 5 steps

Are rewards credit cards worth the work? 

Unlike a standard, low-rate, no-frills credit card, a rewards card requires more attention and effort to maximise the benefits. You might have to dedicate a little extra time each month to go through your points and strategise how you can shop with partner brands more often. If you’re willing to put in the effort, rewards credit cards can support your personal finances. With access to discounts on hundreds of products, you can save money on regular expenses, travel, gifts and new products. 

Credit card rewards and loyalty programs are one way to ‘make your money back’ from banks. If you can use a credit card effectively, paying no or low interest and fees, you might as well earn rewards doing it.


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