Remember my post about the ‘too good to be true’ NAB Flybuys credit card? When commenter Virginia suggested the Coles Flybuys Mastercard as an alternative, I sussed it out and discovered that it was much better value than the NAB, which is unsurprising since ‘[r]eward points for merchant-branded four-party platinum cards are more generous than the bank-branded platinum cards’ (via RBA’s March 2012 Bulletin).
In spite of my hesitation towards getting another credit card, the Coles Flybuys Mastercard deal was as good as, if not better than the latest SuperFood Ideas magazine being marked down from $2.99 to $2. So I signed up for a new card. Gosh, I am such a sucker for bargains.
There would be rules, however, surrounding its use:
- I had to spend at least $4900 each year to offset the annual fee of $49 with Flybuys points.
- In spite of the incentive to spend, I didn’t want to get into the habit of spending just to earn Flybuys points. Therefore the card was only for necessary purchases. Ideally, set recurring expenses, i.e. monthly internet bills, would be the way to go. These are predictable and necessary and do not encourage impulse spending. Unfortunately GE Money (the company who manages Coles Flybuys Mastercard) had already points-blocked me there with fees for direct debit, internet transactions, etc. Reserving the card for less predictable (but still necessary) expenses, i.e. food and petrol, would be the way to go.
- I would have to pay off my credit card balance IN FULL every month to make sure that I didn’t get slugged the twenty-something per cent interest charged on purchases.
As the Mastercard approaches its one-year anniversary, it’s time to review my usage of it:
- The card has earned its keep twice over. In nine months, the card has racked up 21,708 Flybuys points, the equivalent of $108.54.
- I’ve stuck to my plan and used the card on groceries and petrol. Nevertheless, I have noticed that I’m slipping, reaching for the credit card more and more for non-essential purchases like I used to back in the pre-mortgage days. Thankfully, my deliberately small credit card limit has curtailed most of my non-essential spending, but sometimes I max out my card, which means that I have to pay some of the balance off before the sixty-two-days-interest-free period is up. This is not a good thing.
- Unlike my other bills, I’ve been spot on with payment every month for this particular card. I also make sure I always have enough money to pay the monthly balance by immediately transferring the amount charged to the card from the designated spendings account into a designated savings/home-loan-offset account. It’s complicated, but it works for me, and it also allows me to shave off some home-loan interest.
To summarise in a 2 Broke Girls kind of way, I’ve spent $49* and gained $108.54, so current total is $59.54. Take that Coles/GE Money!
Unfortunately Wesfarmers (the company that own Coles) is still profitting. By signing me up to Flybuys and Flybuys Mastercard, it has made me a super loyal shopper. I now shop almost exclusively at Coles and Coles Shell and I’m sure Wesfarmers gets kickbacks whenever I book a restaurant through the Flybuys Dining system. I’m supporting the Coles/Woollies duopoly to the detriment of the independents and the food manufacturers, and I’m not sure how that will affect the affordability of food in the long run.
Plus having Flybuys is not always a good thing. For instance, I was so caught up in my Flybuys-points-chomping frenzy, that I didn’t realise I was spending more money booking tickets through Webjet than directly through Virgin.
These are issues to be considered in a future post. At the moment, the more important question is, what am I going to do with my Flybuys points?
I’m hoping to save them up for a nice present to Cheap Geek and myself. A Kitchenaid perhaps?
How many points do I need to get one of those? 140,300? Say whaaaat?
*Actually, the $49 annual fee is waived for the first year, so I’m up $108.54. Yay me.