I've just spent a few hours looking at credit card options and thought I'd summarise my findings because there are significant differences in the cards on offer and the pros/cons of each.
First up my wants:
* rewards that convert efficiently to Qantas Frequent Flyer
* 55 days interest free
* purchase & travel insurance cover
* smallest card fee possible
Note that I did not consider interest rate at all in my comparisons because I always pay my card off in full every month.
This basically lands me in Gold card territory since most standard cards have either rewards or free insurance cover but not both. Gold cards typically have an annual fee between $100 and $150.
The attraction to a rewards program that converts efficiently to Qantas Frequent Flyer points is due to the fact that I hate having multiple credit cards with multiple rewards programs, and that the banks use this fact to lock customers into their particular cards. They prey on the fact that customers will either be too lazy to switch cards once they realise the hassle involved in using up their rewards points, or that they'll forget to use rewards points when they leave. Given that I travel pretty regularly it makes sense to just convert all my credit card rewards points to QFF and aggregate them that way.
Is there a better way to extract value from credit card spend?
Honestly, I can't be bothered finding out. It may well be more effective to convert rewards points to redeem annual fees for example, or to change them to movie passes. For example Westpac Altitude converts 15000 points into a $100 voucher at Dymocks, Myer and other stores. Or 7400 points into 4 adult movie passes ($60 value). This equates to around 0.67c per point and provides a good hint as to the value of a frequent flyer point since Altitude converts rewards point to QFF at 2:1, this would make a Qantas Frequent Flyer point worth about 1.3c.
Is the Gold card worth the additional fee?
Standard cards with 55 days interest free can be had for free. Virgin Money offers a fee free MasterCard for example.
In my case the main benefit is the frequent flyer points. Let's assume that a FF point is worth 1.3c based on the calculations above. This is lower than the 2c mile/point mentioned in Wikipedia, and pretty close to what you get if you take some Qantas flight prices and divide it by the FF points required.
The CitiBank Gold card I eventually settled on has an annual fee of $120, so at 1.3c value per point I'd want to be putting at least $9,200 through the card each year to earn back my annual fee. Given that I have historically put about $20,000 a year through my credit cards I'm easily past this barrier.
The Result
Firstly, some random learnings from looking at far too many bank/credit union sites:
* CitiBank offers the only VISA/MasterCard program in Australia with 1:1 reward point to QFF conversion, where 1 reward point is $1 spent; Commonwealth Bank and NAB both have programs that convert at a ratio of 3:2. Most other banks convert at 2:1 which is just lame.
* most (if not all) credit unions re-sell CitiBank's MasterCard via a company called "Card Services Direct" with a rewards program called BlueSky. The T&Cs for Card Services Direct are almost identical to CitiBank, the differences being that CSD caps rewards points at 60,000 per year whereas CitiBank says they MAY cap them at 60,000, and CSD resellers offer "Delivery Protection" which apparently insures you against non-delivery of goods which would be nice for online shopping, except CSD doesn't actually link the T&Cs for this feature, and CitiBank's own program specifically
* everyone offers Travel Insurance via Zurich Insurance, except for the NAB which uses another insurer
* someone could probably make themselves a tidy sum by building a credit card recommendation service. Information (especially the T&Cs) regarding credit cards, their fees and reward program limitations is remarkably painful to dig up, and there are clear winners in each category. I tried to use InfoChoice but it sucks as its lacking information and decent search functionality.
The exact same CitiBank Gold card program is available directly from CitiBank (duh) and various credit unions with the credit unions having a $99 fee vs CitiBank's $119.
Conclusion: I'm choosing to go with a CitiBank VISA since they have far more branches should I ever need to use one (especially if travelling). I'll also be keeping a Virgin Money MasterCard as a backup.
