Postcards from Perkistan

Over the last year and a bit there have been numerous comparisons between FlyBuys and Everyday Rewards, most notably the survey conducted by Choice back in January.

Each time the reports cover grocery shopping and the combination between Everyday Rewards and Qantas Frequent Flyer usually wins the battle. This prompts a response from FlyBuys stating that FlyBuys isn’t simply about grocery shopping. Well, this time they’ll have to get creative as the FlyBuys program is more rewarding than Everyday Rewards when only shopping groceries.

Of course, I’m referring to the new credit card offering from Woolworths and Qantas compared to the already existing Coles Group Source MasterCard. Now, I am aware that both of these cards offer benefits outside the supermarket and different people value these various benefits in different ways. For the sake of this comparison, let’s look at the cards as average Australian family looking to get more out of their weekly grocery shop.

Woolworths Everyday Rewards Qantas Credit Card

Earn Rate: 1 point per dollar on eligible purchases, an additional point for every dollar spent over $30 in one transaction at participating Woolworths Group Stores.

According to Roy Morgan research, and as can be found in the Choice article, the average Australian family spends $156 a week in the supermarket. We’ll assume that the family does one weekly shop. From this we get the following:

156 points each week from the card itself, 8,112 points per year.
126 points each week for each dollar spent over $30 in one transaction, 6,552 points per year.

This adding up to a grand total of 14,664 points each year. Given that the user of this card is looking for more bang for their buck at the supermarket, we’ll redeem for a WISH Gift Card.

$100 WISH Gift Card: 14,500 Qantas Frequent Flyer points.
% Of Reward Earned : 101% Giving the points a value of $101.13 with this way of earning and redeeming.

Coles Group Source MasterCard

Earn Rate: 2 points per five dollars on eligible purchases, an additional two points per five dollars when also displaying your FlyBuys card.

62 points each week from the card itself making 3,224 points per year.
62 points each week from the FlyBuys card making 3,224 points per year.

This adding up to a grand total of 6,448 points each year. A similar redemption option to the WISH gift card is a FlyBuys gift card.

$20 FlyBuys Gift Card: 2,500 FlyBuys points.
% of reward earned   : 257.92% Giving the points a value of $51.58 with this way of earning and redeeming.

With all that in mind, the Woolworths Everyday Rewards Qantas Credit Card looks like the clear winner, but the Coles Group Source Mastercard has no annual fee, opposed to an $89 fee attached to the Woolworths Qantas card. Here’s how they stack up, annual fees deducted:

Woolworths Everyday Rewards Qantas Credit Card Net Profit: $12.13
Coles Group Source Mastercard Net Profit: $51.58

When the dust settles, the Coles Group Source Mastercard is the better rewards credit card out of these two offerings when it comes to purely grocery shopping.

What do you think of the new card by Woolworths and Qantas?

Cheers,
Graham

* This information is intended as a guide only. Please consult your financial adviser before making any decisions regarding the information found in this article or it’s comments.

Just this week David Jones have re-launched their American Express rewards card offering. The new program moves away from what most Australian cards offer and follows what credit cards in the United States have been doing for a while, where there is increased points-earning on core purchases such as groceries and fuel.

The Old Card

With the old David Jones American Express bonus points could be earned with a handful of partners and at David Jones at a rate of 2 points per dollar with 1.5 points being earned on purchases outside David Jones. There was a $50 gift card for the first spend outside David Jones and a 6 month double-points earning period to get you in to the card. Redemption options, however, were very limited with the option of Travel or David Jones gift cards.

The New Card

Now you can earn 3 points per dollar at major supermarkets and petrol stations. This includes: Bi-Lo, Flemings, Safeway, Woolworths, Coles, IGA, Franklins, Fishers, Fresh Provisions, Food For Less, Supabarn, Macro Wholefoods, Thomas Dux, BP, Shell, Caltex Woolworths, 7 Eleven, Woolworths Petrol, Safeway petrol, and Peak.

A pretty decent list wouldn’t you say?

You will continue to earn 2 points per dollar at David Jones, however spending outside the partners listed above and David Jones the earn-rate has been reduced from 1.5 points per dollar to 1 point per dollar. In my opinion a reasonable drop given the list of big retailers where points-earning has been increased.

They haven’t done away with join incentives, but they have changed. Now earn 13,500 bonus points for your first spend outside David Jones, but it must be within 7 days. 13,500 points is equivalent to $100 worth of David Jones Gift Cards, so that’s your first year’s annual fee covered.

In the old system we saw that redemption options were very limited. This has now been amped up with a partnership with American Express Membership Rewards, allowing redemptions for a wide range of perks including gift cards, entertainment, merchandise, travel (including transfers to 7 partner frequent flyer programs), and experiences.

All in all I think they’ve strengthened their offering and it’s a move that is likely to shake up a few of the other cards in the Australian market. Let me know what you think below.

Annual Fee: $99
Interest Rate: 20.49%
Interest Free Days: 44

View the Full Perk Listing

Cheers,
Graham

* This information is provided as a guide only and was correct at the time of writing.

‪We’ve just come across mozo.com.au, a pretty cool competitor for RateCity and other rate aggregators out there. They’ve been in the media this week as they have just launched a brand new tool to compare rewards credit cards.

The Rewards Revealer allows you to enter details about your credit spending habits and the type of reward you like. Then, based on the points you will earn and annual fees, the Rewards Revealer will show you the “highest rated” credits cards based on the dollar value of the redeemable rewards.

This is a great tool to start your research in to a rewards credit card that may be right for you. Keeping in mind that the tool is calculating rewards on the base earn-rate of the cards only.

In Mozo’s press release they knock rewards credit cards saying they are “Unrewarding” and that they “fail consumers”. They’re right on face value. The rewards don’t look too crash hot when reviewing individual programs with the Rewards Revealer. But utilising loyalty programs is much broader than just a $ value for point calculation.

The Rewards Revealer does not take in to account the complimentary services that come with premium credit cards, such as insurance and concierge services that don’t have a monetary value.

Though they are pretty open about not including bonus shopping days in their calculations, it’s these and other personalised rewards that consumers love – like access to pre-sale tickets and other ‘clubs within the club’. These are a critical part of the rewards credit card decision making process.

Use your credit card to earn points at the same time as using individual retailer rewards cards and you get even more advantage. Research we have conducted here at Perkler HQ reveals that an average family of four can save over $4,100 through the use of rewards programs in their everyday spending.

We agree completely with the Mozo conclusion that on paper credit card point scales offer little direct cash benefit, but we still maintain the broader loyalty redemption market is strong. As we always say – if you are going to shop there anyway, why not get some kind of benefit?

Classic example is Westpac Altitude. Here at Perkler Jus uses his. The direct points value is pretty low – but using points to fly him and Mrs Jus to Melbourne for a weekend away from the kids is worth more than a dollar calculation - though he does love his kids

Check out the Rewards Revealer

and read what SMH have to say