Using credit cards to boost your points balance is the no-brainer part of the equation. I’d actually argue that this is the only way you’re going to get to redeem anything of real value, unless you’re Don Draper and being flown around the country in Business Class by your workplace.
Many of the bonus offers alone can get you a long way, with some banks previously offering 75,000 points or more as a signup bonus. That could get you a fair way in Economy. Work at it for a while, or even sign up to more than one card and you’re well on your way to getting somewhere at the pointy end of the plane.
Which credit card?
You can choose between ‘direct earn’ cards, that will earn points directly for one particular airline, or you can join a bank’s rewards program, and then decide later where to send the points.
Generally speaking, American Express’ reward program is the only non direct-earn scheme that can transfer points to Qantas, so Qantas point collectors may be better served with a direct earn card. The exception is if you are willing to consider the $1200 annual fee American Express Platinum Charge card, which comes with a vast array of benefits including points transfer to Qantas among many others, but a very hefty annual fee.
So, take note of the point earn on any card you’re thinking about. Some may offer half a point per dollar spent while others may offer two or more. More often than not, any additional annual fees are going to be higher the more points are on offer, so do your due diligence.
Point Hacks covers all the major cards on offer in Australia showing the best deals and bonus offers for both direct earn and bank rewards cards. Have a read through the various credit card guides to get an idea of the different products available.
Daily Spend
This strategy certainly isn’t for everyone, as these cards can attract massive interest rates. If you’re not prepared to commit to paying off your balance every month, then skip this section and look at your debit card options below.
Note that the following in no way constitutes anything even close to financial advice- it’s simply a commentary on how I run our household finances. Take from it what you like.
In an average month, there are thousands of points coming in the door, just by running everything through our points earning cards. And by everything, I mean everything. If I’m buying a bottle of water from the corner store, it goes on my Amex.
How involved you get in the mechanics of this is up to you, with many cards offering differing points earns for different items. Things like restaurants, fuel or supermarkets can all earn different points rates, depending on which card you use.
Personally, I’m a sucker for simplicity and not a huge fan of annual fees. Even though I could theoretically earn a few more points with a more specialised card collection, I have two that I use for my points earn.
- A bank-branded American Express card that pays out 1.5 Qantas points for every dollar I spend on it.
- A bank-branded Mastercard that pays out one point per dollar spent. I use this when Amex is either not accepted, or comes with a transaction fee.
Direct Debiting my bills through my Amex is one example of a pretty nice win. For every dollar I’ve been billed for my mobile, gas, electricity and water, I get 1.5 Qantas points. Don’t get me wrong, I still hate paying bills, but at least now they have an upside.
There’s also a lot to be said for cards which earn points into ‘flexible points programs’ instead of a direct earn airline branded credit card. These are still very accessible to beginners to the points game, but will take a little reading to understand why they are so beneficial – thankfully there’s a full guide to flexible points programs here.
Debit Cards
If credit cards aren’t your thing, then there’s still plenty of opportunity to earn on debit cards such as the Bankwest Transaction Account and Qantas Credit Union savings accounts.
There are also Qantas Cash and Velocity Global Wallet, which are debit travel cards that can rake in the points as well.
None of these are personal recommendations about any particular product. You’ll need to do your own research to assess whether they’re suitable for you.
Earning Points: First Principles
- Getting Started with Frequent Flyer programs
- Earning by Flying
- Buying points and miles
- Earning from Credit Cards
- Earning from Offers & Partners
- Ask Questions & Keep in the Loop
- Earning and Using Points – First Principles
Using Points: First Principles
- Who, What, When, Where and How?
- Planning
- Flexibility
- Tools
- Flexible Points Programs
- Maximising Points value
- Qantas and Virgin Australia Key Partners
- Searching for points seats
I run my household in a similar way Sam, and I guess I am a sucker for QF, but I’ve been lucky enough to get the seats I want when I want them, so I can’t complain. As an extra piece of non-financial advice, I personally have an extra card also that doesn’t charge international transaction fees or currency conversion fees. Some point card give extra points for international spend, however the fees the majority of banks charge add at least 3% to everything bought in a foreign currency. That may not matter if I was only buying the odd thing off eBay in US dollars, but I personally spend at lot of money outside Australia so for me, that 3% adds up.
IMHO…Keith / Sam – this is a good introductory article on an extremely valuable website for all Australian travellers.
Having tried to help any number of friends / colleagues with immersion into the frequent flyer world I appreciate that most are put off by the complexities and options at hand and simple up front messages may be needed to encourage people.
Many “beginners”already have an airline branded credit card aligned with either VA or QF.
The challenge is that real value is only unleashed once you step outside of the VA/ QF hegemony and if you catch a “beginner” early enough you could theoretically save them much wasted time / effort / misguided credit card choices: also, as Michael Kao observes, people can be limited in the number of credit cards due to credit rating considerations.
I don’t agree with the argument that Amex Platinum is too “complex” is a valid one when advising beginners (after all, the major benefits of the card can be selected and simply explained). The 120,000 points bonus (nominal worth 120,000 x 2.5 cents = $3,000) easily offsets the annual fee. I am assuming that frequent flyer know how is only really valuable to those people / business owners with some sort of decent cash flow.
Avoiding being “locked” into just QF or VA is, IMHO, one of the most important messages you can share with “beginners” – the sooner people realise they need to step outside of this, the quicker they’ll get rewarded!
The reason that QF and VA can charge such high redemption rates is most Australians presume they have no other choices from competitive airlines / recent flyer schemes!
Is the purpose to here promote QF / VA or the best interests of the traveller?
Hey Platy – understand where you are coming from. I have added a comment and link for further reading for both flexible points programs and the Platinum Charge card. Appreciate the feedback.
Another feedback. For a beginner’s article, I think it is important to point out the risk of hurting credit score if signing up too many credit cards within a short period. I made that mistake when I first started after reading many blogs (mostly American ones, who has different credit score system), think by getting sign up bonus was the easiest way to boost up points.
It took me a long time to recover my credit score before I can apply another one.
Hey MK – agree. We have some great content coming up on the Australian credit system and approval processes. Coming soon…
Hey Keith, any ETA on the content about the Aussie credit system? While I keep an eye on my score with both getcreditscore.com.au (Veda) and creditsavvy.com.au (Experian), actual advice on what happens during/after applications are a little thin on the ground.
It’s so close! Hoping next week, but not totally in my hands unfortunately.
Accepting everyone is different and this is designed to be an entry level article, but…your simplicity strategy may be wrong for many: there are many powerful reasons for NOT going with airline-affiliated cards and surely it’s important to point this out to folk who are new to the game?
Your statement “even though I could theoretically earn a few more points”…is misleading when you need 50% more points on QF than SQ for a premium long distance redemption and the earn rate on some cards is much greater than your QF-affiliated cards.
A 30-100% better point earn rate (say 2 points rather than 1 or 1.5 points per dollar) and a 50% better redemption rate could put a cardholder with reasonable cashflow way ahead over your simplicity strategy.
Also, your statement …”Generally speaking, American Express’ reward program is the only non direct-earn scheme that can transfer points to Qantas, so Qantas point collectors may be better served with a direct earn card…” makes no logical sense, in fact is potentially BAD advice: a QF point collector can still use the AMEX membership rewards based card and transfer to QF at will (AND get the benefit of flexibility of transferring points to alternate schemes).
Jumping in first only because I saw this first…
To the MR/Qantas point, Membership Rewards transfers to Qantas are only available with the $1200 pa Platinum Charge card. Given the complexity and cost of that card, and that this piece is aimed at beginners, I think it’s fair to say that Qantas Point collectors may be better served by a direct earn card.
As for your first point – yep, many programs have better redemption rates than Qantas. However this is Sam’s personal example, Qantas works for him and the point of this piece is purely to point out that credit and debit cards are one of the primary ways of earning points, and that putting your spend on them and managing your finances accordingly, and starting to look around what’s on the market to see what meets your needs, not to recommend Qantas over any program or a specific card or rewards program. We’ll try and make that clearer though. Thanks for the feedback!