The number of seats on a flight which are available for redemption with points is limited to what is probably a small number (exact numbers seem to be a closely guarded secret). Even outside blackout periods, only a limited number of seats on each flight may be available Bad luck if you're a student or teacher and can only go away during the school holidays! Naturally an airline won't want to "give away" a seat in a time of high demand, when it can be sure of selling every seat to customers paying with money. These periods usually coincide with the times when people most want to fly, such as holiday periods. Airlines usually impose blackout periods when points can't be used Increasing spending will still increase the points earned, but not by as much.ĥ. In the good old days, doubling my credit card spending could double my points - until a monthly cap was applied. Spending caps may be introduced, or tightened.as a point earner, my credit card lost half its value overnight. Originally I earned one point for every dollar I spent, then suddenly it became one point for every two dollars spent. The number of points earned per dollar spent may decrease.Annual credit card fees may increase - the card I once used was fee-free to begin with, then a $30 annual fee was introduced, which later increased to $70, then $100.There's an expression for this: moving the goalposts. Banks can change the rules at any timeĮven if a frequent-flyer credit card looks cost effective when you sign up, by the time you've saved enough points for a flight (which could be many years) it may have cost you much more than you expected and taken longer - thanks to the bank changing the conditions. This makes it harder to accrue lots of points by spending big, such as for business purchases or spending on behalf of others.
Beyond that, each further dollar spent might only get half of these points per dollar. but only up to a certain limit each month, say $1000. Banks may impose monthly spending caps, beyond which any further spending earns points at a reduced rateįor example, you may earn a certain number of points (typically 1.0 or 0.5) for every dollar spent. If you pay with a card to earn points when you might otherwise use a fee-free payment method (like bPay, eftpos, or even cash), then the total of all these surcharges can add up. Often when making purchases or paying bills there is a small surcharge for paying by credit card, usually up to 2%. Credit card surcharges may cancel out some of the value of the frequent-flyer points
This one factor alone can make credit cards an uneconomic way of earning points, considering that most banks also offer non-rewards credit cards with no annual fees. Unless you're a big spender, or the annual card fee is low, the total of all the annual card fees you are charged, over the years it takes to accumulate enough points for a flight, can often exceed the cost of the flight. In Australia, all credit cards which earn rewards have an annual fee. The annual credit card fee may cancel out some, or all, of the value of the frequent-flyer points The first four reasons relate to the credit card, and the rest relate to airline frequent flyer programs.ġ. Based on my own experiences with Australian credit cards and airlines, here are some reasons why frequent-flyer credit cards may be a waste of time. how can you lose? While some people do well from these schemes, others don't.
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Get free flights just by spending money that you would have spent anyway. It sounds great on the surface - use a frequent-flyer credit card to pay bills and living expenses, and earn points towards your frequent flyer membership. Many people sing the praises of credit cards which earn frequent flyer points. Exploring roads less travelled in the cooler parts of Australia and New Zealand Home Articles Places Categories Videos Maps About Sitemap Ten reasons to think twice about frequent flyer credit cards Why using a rewards card to earn free flights might cost more than the price of the flights
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