What’s on offer for rewards credit cards?

Co-author: James Slack

There’s no denying that we all like being rewarded. If you’re a savvy credit card user and you like the idea of earning points as you spend, a rewards credit card could be an attractive option for you.

rewards credit card gives you extra benefits that are earned according to how much money you spend on your credit card. For each dollar you spend, you earn a certain number of rewards points, which can be redeemed for cash rewards, merchandise, shopping vouchers and more.

Why get a rewards credit card?

If you’re looking for a new credit card, a rewards card might suit you if some of these statements apply to your spending habits:

  • You pay your closing credit card balance in full each month (interest rates on rewards credit cards are often around 20% p.a.).
  • You want to earn points that can be redeemed for cash back, gift vouchers, merchandise, or travel agents.
  • You aren’t interested in holding or redeeming points with frequent flyer programs (e.g. Air New Zealand Airpoints).

A rewards credit card may not be for you if:

  • You rarely pay off your balance in full or only use your credit card occasionally.
  • You want the best rates when redeeming points for flights or upgrades through airlines.
  • You want benefits such as travel insurance but aren’t particularly interested in earning points that you will never redeem.

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What are the average rates and fees for rewards credit cards?

Interest rates and annual fees on credit cards that are attached to rewards programs can be higher than those without. The tables below show minimum, average, and maximum purchase rates and annual fees on credit cards on Canstar’s database – both with and without rewards programs.

Interest rates on rewards credit cards

Purchase Rate (p.a.)
Rewards Minimum Average Maximum
Without 12.65% 16% 25.99%
With 16.95% 17.65% 20.95%
All cards 12.65% 17.75% 25.99%
Source: Canstar. Rates as at 24 October 2018.

Annual fees for rewards credit cards

Annual Fee
Rewards Minimum Average Maximum
Without Nil $36 $80
With Nil $168 $390
All cards Nil $115 $390
Source: Canstar. Fees as at 24 October 2018.

What rewards credit cards are available in New Zealand?

Most major New Zealand banks offer rewards credit cards with a range of different features, fees and interest rates. The right rewards credit card for you will depend on your spending habits, the way you use your credit card and how you plan to use your rewards points. You can compare the different rewards cards on offer using Canstar’s database:

Compare Credit Card Rewards

If you’re considering a rewards card and you’re also a bit of a jet-setter, a flight rewards credit card could be a better option for you. You can compare flight rewards credit cards using Canstar’s database:

Compare Credit Cards

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