Forget a low interest rate or a modest annual fee; the credit card feature that is most-commonly sought by Kiwis is a rewards program*.
“We spend around 3 billion per month on our credit cards so it does make sense that around forty percent of us are specifically looking for a credit card that has a rewards program,” said Canstar General Manager – New Zealand, Jose George.
“With Kiwis making around 170,000 overseas trips each month and spending around $400 million a month in overseas-based transactions it’s also not surprising that inbuilt travel insurance is popular, with almost one-quarter of those in the market for a credit card wanting this feature.”
Canstar has crunched the numbers on the relative rewards value provided by 45 credit cards across 10 financial institutions, finding the average annual reward available at various spending levels as follows:
|Rewards Profile||Annual Spending ($)||Average Annual Fee||Average Purchase Rate (p.a.)||Average Reward Return|
Source: Canstar. Based on products assessed for 2016 Credit Card Rewards Star Ratings. Represents the average of the 5 star rated products assessed.
“The more you spend on your credit card, the higher the average dollar value of reward you can receive. So if you spend a lot of money on credit each year you may get value from having a platinum card with a higher earn rate and no cap on the number of points that you can earn,” said Mr George.
Check the earn rate
According to Canstar’s analysis there is a significant difference between the earn rate on a five star-rated product and a lesser-rated product.
“Based on the products we assessed, someone spending $60,000 per year on a rewards credit card could potentially earn as much as $920 in flight rewards or as little as $170,” said Mr George.
“For general rewards, they could potentially earn as much as $915 and as little as $250 on the same dollar value of spending.
“Don’t assume that just because your credit card is platinum or has the word ‘premium’ in its name that you’re getting the best value. Check what the rewards earn rate is on your card and compare that to what else in on offer in the market. Make sure that the card you choose matches your spending habits.”
The cards that offer outstanding value
Canstar has assessed 45 rewards credit cards from 10 financial institutions and rated them against four levels of spending to determine which ones offer outstanding value for money.
|$12,000 spend||Warehouse Money||Warehouse Money Purple Visa Card|
|$12,000 spend||GE Money||Onecard Visa Rewards|
|$24,000 spend||BNZ||Advantage Visa Platinum|
|$24,000 spend||GE Money||Onecard Visa Rewards|
|$60,000 spend||BNZ||Advantage Visa Platinum|
|$60,000 spend||Westpac||hotpoints World MasterCard|
|$120,000 spend||BNZ||Advantage Visa Platinum|
|$120,000 spend||Westpac||hotpoints World MasterCard|
|$12,000 spend||American Express||Platinum Edge Credit Card|
|$12,000 spend||American Express||Air New Zealand Credit Card|
|$24,000 spend||American Express||Platinum Edge Credit Card|
|$24,000 spend||American Express||Air New Zealand Credit Card|
|$60,000 spend||Kiwibank||Airpoints Platinum MasterCard|
|$60,000 spend||Westpac||Airpoints Platinum MasterCard|
|$60,000 spend||ANZ||Airpoints Visa Platinum|
|$120,000 spend||Westpac||Airpoints World MasterCard|
|$120,000 spend||Kiwibank||Airpoints Platinum MasterCard|
Source: Canstar. Based on products assessed for 2016 Credit Card Rewards Star Ratings.
“There is a huge difference between products on offer and we congratulate the institutions that are offering outstanding value to New Zealand consumers,” said Mr George.
Consumers can download the Home Loan Star Ratings at www.canstar.co.nz
* Statistics based on analysis of more than 2,000 visitors to the Canstar credit card selector pages between 1 Jan – 30 April 2016.
For further information, contact:
Brenda Newth, SenateSHJ +021 655 534
Canstar provides Australia and New Zealand’s only fully interactive online research service in retail and business finance.
Founded in 1992, Canstar Pty Limited (formerly CANNEX) is Australia and New Zealand’s premier researcher of retail finance information for over 250 institutions such as Banks, Building Societies, Credit Unions, Finance Companies, Brokers, Mortgage Originators, Life Companies and finance related Internet Portals.
Canstar customers use the extensive database for competitor analysis as well as a means of disseminating their product range. Canstar also distributes this information to print and electronic media for publication and to Agents, Accountants, Brokers and Internet Portals for use in advising their clients.
What are the Canstar star ratings?
Canstar researches, compares and rates the suite of banking products listed below. Results are freely available to consumers who use the star ratings as a guide to product excellence. The use of similar star ratings logos also builds consumer recognition of quality products across all categories. Please access the Canstar website at www.canstar.co.nz if you would like to view the latest star ratings reports of interest.
© Canstar New Zealand Limited (3225469), 2008-2013. The recipient must not reproduce or transmit to third parties the whole or any part of this work, whether attributed to Canstar or not, unless with prior written permission from Canstar, which if provided, may be provided on conditions.
To the extent that any Canstar data, ratings or commentary constitutes general advice, this advice has been prepared by Canstar New Zealand Limited (3225469) FSP 200146 and does not take into account your individual investment objectives, financial circumstances or needs. Information provided does not constitute financial, taxation or other professional advice and should not be relied upon as such. Canstar recommends that, before you make any financial decision, you seek professional advice from a suitably qualified adviser. A Product Disclosure Statement relating to the product should also be obtained and considered before making any decision about whether to acquire the product. Canstar acknowledges that past performance is not a reliable indicator of future performance.