Looking at ways to save money can be achieved in many different ways. I’m sure you’ll agree everybody’s favourite way to save is to get something for free, especially when it’s something you were going to dip into your savings to purchase. Frequent flyer cards promote the opportunity to gain freebies just by using their card, but are you really getting something for nothing?
I hope you enjoy the article below and as always, Happy Saving!
The premise is golden: spend on your credit card and earn frequent flyer miles as you go! But are these reward cards really worth the effort?
The answer, it seems, depends on how much you spend on your card, and how you manage your accounts.
“Travel rewards credit cards allow you to earn points towards flights and holidays as you spend, but if you choose the wrong one, you may find the experience far from rewarding,” says Brendan Mays from consumer watchdog Choice.com.au.
According to Choice, you need to spend at least $2,000 in purchases per month on a rewards credit card to generate any positive return, once you take into account the annual fee.
But this doesn’t factor in the interest payable on your purchases: if you don’t pay off your entire credit card balance in full each month, then there’s a very good chance that your frequent flyer card won’t be doing you any favours at all.
Choice looked at 63 cards in total, with each offering either their own dedicated travel rewards program, or a link to an airline’s frequent traveller program.
Their research found that those who spend a decent amount every month – that is, at least several thousand dollars – clearly stand to gain the most.
“We sized up the major card loyalty programs and found that on average, spending around $1,000 a month on your card will cost more in fees than you earn in rewards,” Mays says.
However, there are additional factors to keep in mind. For instance, you often have to use your Amex to earn the most points. With some Qantas-linked Frequent Flyer cards, you only earn 1 point per $2 spent on the Visa, but you earn 1 point per $1.50 spent on your Amex.
The extra points generated on the Amex are a bonus, but some retailers charge up to 2% to use an Amex. So, you’ll need to figure out whether the costs of using the card outweigh the benefits you receive in frequent flyer points. It’s almost too complicated to calculate!
“There are some good-value products available,” Mays clarifies, “but you must choose carefully and pay the balance in full each month.”
He adds, “If you can’t pay your balance in full each month, our advice is to forget about rewards cards altogether and opt for a no-frills, low-interest credit card instead.”
Source: Your Mortgage Magazine
How do you know if it’s time to refinance or consolidate your loans? Let me ask you another question. When is it a good time to put money back in your pocket? EVERY YEAR you should take a home loan health check to find out if the loan you have is still saving you money. A lot can happen in a year, life circumstances can change, you may have taken on extra debts and rates may have moved substantially so you owe it to yourself and your cash flow to check your home loan and debt situation every year.
What reasons have other people like you, refinanced for?
Every client at Assured is unique, just like you. The reasons to refinance or consolidate are unique also. You may be looking to;
- Invest in a new car to keep the family safe on the road
- Install a new pool so you can holiday at home
- Gain some extra funds to secure your children’s education
- Put in that new bathroom you’ve always been talking about
- Pay off your home quicker and gain financial freedom
- Build an extension for the new family addition or just gain some extra space.
- Increase your cash flow to give you a little breathing space
- Landscape your yard and create a great place to relax and play
- Reduce financial stress
- Use the savings you create each month to put away for a rainy day.
- Change to a home loan that has different term which work better for you eg. No monthly account keep or redraw fees. 100% offset facility etc.
- Take a well overdue holiday
- Increase the term of your mortgage so that you can reduce the monthly repayments and free up cash flow
- Getting cash out of the equity in your home loan for whatever reason you feel is needed.
- Roll all your payments into one so you have one convenient payment and interest rate.
