A significant number of Australians are overextending themselves financially in pursuit of rewards points through schemes offering free flights and cashback, according to recent findings from comparison website Finder. The research, which surveyed 452 credit card users, discovered that nearly 40% of respondents struggled to meet the minimum spending thresholds required to earn bonus points, with 11% reporting they had gone into debt to achieve this.
The report highlighted that approximately 2.6 million Australians have either overpaid or accrued debt while attempting to collect rewards points. Angus Kidman, an expert on rewards points at Finder, emphasised the importance of strategic planning when engaging with these programs. He noted that while rewards schemes can provide valuable benefits, overspending or incurring debt to acquire points negates any potential savings, ultimately resulting in financial loss.
Kidman advises cardholders to familiarise themselves with the minimum spending requirements linked to their chosen rewards programs to ensure they align with their expenditure patterns. If the requirements do not match their usual spending, he suggests timing applications around significant purchases, such as holidays or major home goods, to facilitate easier qualification for rewards. Additionally, he cautions against redeeming points for items with minimal value, like inexpensive kitchen appliances.
The key takeaway from the findings is to approach rewards programs with caution, ensuring that the pursuit of points does not lead to unnecessary financial strain.