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Credit Card Programs

At first glance, credit card programs wouldn’t seem to have a place in travel hacking. Look a bit deeper, and you see that credit cards, especially the more premium cards contain features aimed at the travellers.

With regard to travel programs, there are three ways that credit cards might be useful for the traveller.

  • Cards that provide a significant sign up bonus – usually in the form of points that may be funnelled through to a travel program
  • Cards that provide a decent ongoing points earning on everyday spend
  • Cards that provide some travel benefit just for holding the card

Sign up bonus

A sign up bonus is an offer of a number of points that you will receive when you get a new credit card. These bonuses change all the time, and in some cases there are some additional hurdles that need to be met. For example, some cards require you to make an eligible transaction within three months of opening the account to get the points. Others take this further and may require you to meet a certain total expenditure in those three months.

The sign up bonus varies, but 50,000 points or more have been on offer in recent times for new holders.

Ongoing spend

Following the sign up bonus, there are points on offer for actual expenditure on the cards. There is great variation in this across various credit cards, and sometimes the best value lies outside the offerings of the Big 4 banks.

On top of the basic earn rate, you also need to look at whether there is a cap on the points earning. Some cards have a monthly points cap, some have an annual points cap, while others have no cap at all.

More recently, some cards have commenced removing any earning at all for payments made through the card to the Australian Tax Office. This mainly affects people that are in a position to make BAS, Pay As You Go Instalments, or higher education repayments.

You also need to look at the way points earning is structured. While banks tend to have a fairly flat earnings structure, cards from American Express offer different points earns based on the merchant type.

Overall, then, you need to look at your spending patterns to ascertain which card might give you the best points earning capacity.

Benefits for holding cards

Finally, there are a number of cards that offer value to the traveller simply for holding the card. This tends to be more true for the premium cards, such as the Black cards that are now the top of the line offering from many banks.