On point, or not? Why credit card reward schemes have lost their shine
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Every now and again, my friends or family will ask me a money-related question, assuming because I write about money that I might know a thing or two about it (I’m no expert, and this is not financial advice). Often, these questions are related to super or investing, but recently, they’ve increasingly been on credit cards, and more specifically, credit card points and rewards.
Before you sign up for a credit card so you can earn frequent flyer points, you should consider if it’s worth it.Credit: Michael Howard
It’s easy to see why: my generation (Millennials, but we’re cool enough to be Gen Zs) likely grew up with parents who had a credit card and who probably accrued a healthy swag of points on those cards, using them for cheap flights or upgrades.
We’ve also seen the articles/TikToks/Reels of travellers who seemingly travel for free off the back of their points hustling, thinking, could it be too good to be true? And I’m sorry to tell you, but it (just about) is.
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What’s the problem?
When frequent flyer programs started, they were a pretty simple concept: fly with us, and we’ll reward you with points you can then use to get discounts on future flights. But the whole game changed when airlines started giving away points by the bucketload through deals with credit card companies, reaching fever pitch in the early 2000s, with hundreds of thousands of points on offer for signing up to a new card.
However, since then, the market for frequent flyer points has become less lucrative, thanks in part by the pandemic, and persistent inflation. The calculation for points isn’t as straightforward as it once was, and flight upgrades are harder to get, and less frequent.
