Despite having countless loyalty and ‘buy-10-get-1-free’ cards, Flybuys is one of the few programs that has actually given me something, so when I found out that NAB had released a new Flybuys Rewards credit card, I got pretty excited.
Currently, most of my Flybuys points comes from Coles or KMart. Each time I spend $1 at either, I earn 1 Flybys point. If I reach 2,000 points, Flybuys gives me $10 to spend at various stores. Not bad for a program with no join-up fee.
A NAB Flybuys rewards card allows me to earn 1 point for every dollar charged to the card, excluding bills. There’s an annual fee of $65 and only up to 44 interest-free days instead of the preferred 55, so how much do I need to spend in order to profit from this?
Every $2000 put on the credit card gets me $10 credit at Coles. The annual fee is $65. Therefore I need to spend $13,000 each year on the credit card (roughly $1084/month), to break even.
But what about earnings lost from having to pay the monthly credit card balance 11 days early? The average home loan attracts an interest of 6.5% p.a. or 0.0178% per day. Paying 11 days early is going to cost me the additional $25.47 in interest after my $13,000 shopping spree.
So how much do I need to spend on the plastic to get some real rewards? Time for some algebraic gymnastics:
For those of you who can’t read my scribble at the bottom, that’s $21,373.87 per anum. Yep. NAB’s Flybuys credit card is totes RPFS (Rewards Program For Suckers).
Unfortunately it’s not the only one out there. The average bank-branded platinum credit card charges a $185 annual fee and requires a $18,800 p.a. spend to earn a $100 voucher (via RBA’s March 2012 Bulletin). ‘Only the big spenders get any value out of rewards and then only if they pay their full balance each month’ (RateCity’s Damian Smith (via The Age); everyone else is paying for the privilege of owning a prestigious piece of plastic.
And I thought designer costume jewellery was a rip off,