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Aussies are cashing in credit card rewards to help pay for Christmas

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Credit card rewards schemes are going unloved this festive season, despite card providers doing their merry best to sweeten the deals available. While 94% of Australians are members of at least one rewards scheme, a third of people don't feel like they are taking advantage of them, according to a survey of 1000 Aussies undertaken by Citi.

More than one in two people choose their credit card based on the reward scheme, with the same proportion of holders preferring to be rewarded in gift cards.

"With Christmas around the corner, we know consumers are looking for ways to ease the holiday spending pinch," says Choong Yu Lum, head of cards and loans for Citi Australia.

christmas budget wrapping

"Typically, we see customers building up their bank of points throughout the year and using them in October or November to purchase gift cards to pay for their family Christmas gifts."

In November, the number of customers cashing in rewards points jumped 72% compared with October, he says.

Age also has an effect on how people use their rewards.

About 20% of Gen Y and Gen Z users said they use points to give something special to a loved one, compared to just 12% of those in Gen X and 7% of Baby Boomers.

The banks have sweetened credit card rewards and conditions during this festive season in the hope of attracting new customers.

Comparison site Mozo has found that card providers improved 23 offers ahead of Christmas. Ten cards adding introductory interest-free periods, while four added cash-back offers.

"We're seeing a surge in new credit card sweeteners right now as providers fight it out for the most alluring offers on the market and consumers gear up for the festive season spending frenzy. Australians spend more in December than any other month of the year," says Mozo director Kirsty Lamont.

"Enticing offers include massive bonus points offers, introductory interest rate periods, reduced purchase rates, lower annual fees and cashback offers, although cashback had certainly declined compared to years prior.

The deals on offer include:

  • 200,000 points on the St George Amplify Signature card when you spend a minimum of $1000 per month over the course of two years;
  • 150,000 bonus Qantas points on the Qantas Premier Titanium card when you spend $5000 within 90 of card approval;
  • 140,000 points on the Westpac Altitude Black with Amex when you spend a minimum of $4000 spend over 90 days.

However, customers should do their due diligence before rushing to sign up to a new card.

"While it can certainly be tempting to sign up for the biggest and brightest rewards, it's important to consider your financial situation and how much you can afford to spend. No one wants to roll into the new year saddled with blistering credit card debt," cautions Lamont.

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David Thornton is a journalist at Money magazine. He previously worked at Your Money, covering market news as producer of Trading Day Live. Before that, he covered business and finance news at The Constant Investor. David holds a Masters of International Relations from the University of Melbourne.
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