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How Credit Card Rewards Work in Australia

By PointsExplainedLast reviewed

Find out where your points go

Check whether the card earns points in the issuer's own rewards program or directly in an airline program, and whether points can be transferred to partners. Remember that transfer terms can be changed by the partner.

Value your usual redemption

Use the ACCC's method: cash price you would otherwise pay, minus taxes and fees you still pay on the reward, divided by the points required. Do this for the reward you would actually book, not the best case.

Work out what the points cost you

Add up the annual fee and any rewards program fee, which Moneysmart lists among the costs to compare, and weigh them against the value of the points you realistically expect to earn.

Pay the full balance every month

Interest-free days only apply when you pay the full balance by the due date, and Moneysmart warns rewards cards can cost more if you don't.

Redeem before you close a card

Moneysmart recommends redeeming rewards points before you close a card so that you don't lose them.

Where this comes from

Sources

The documents this guide relies on. If one has changed since we read it, the document is right and this guide is out of date.

  1. ACCC: Customer loyalty schemes – final report (December 2019)

    Major banks and American Express ran their own rewards programs (2019, p. 9); larger issuers offer direct-earn cards with Qantas Frequent Flyer, Velocity and Flybuys and own-program points can sometimes be converted (p. 15); worked examples valuing points at 3.3c and 0.5c and costing points at 0.5c; consumer complaints about unilateral changes to earn rates and point values (p. vi); Recommendation 1: prominent and timely advance notice and a genuine opportunity to redeem before a reduction (p. vi).

    accc.gov.au · Accessed
  2. Velocity Frequent Flyer: Earning Points

    Members can transfer rewards points to Velocity from eligible partners including credit card partners.

    velocityfrequentflyer.com · Accessed
  3. Velocity Frequent Flyer Membership Terms and Conditions (effective 17 August 2026)

    Partners may change the number of partner points required to transfer to Velocity; Points have no cash value and can't be converted to cash.

    velocityfrequentflyer.com · Accessed
  4. Qantas Cards and Banking: Get to know your Qantas Points earning credit card

    A rewards credit card has a rewards program attached and earns points on eligible purchases; linked Qantas Points earning credit cards credit points automatically, usually monthly; there may be a cap on monthly points (article dated 3 September 2024).

    cardsandbanking.qantas.com · Accessed
  5. Moneysmart (ASIC): Choosing a credit card

    Jen's rewards example ($30 fee, $5,700 spend for a $25 gift card); rewards cards can cost more if you don't pay in full; interest-free days only apply if the full balance is paid; no-frills card if carrying a balance; rewards program fee as a cost; check earn, redemption, caps and expiry.

    moneysmart.gov.au · Accessed
  6. RBA media release 2026-10: Review of Merchant Card Payment Costs and Surcharging – Conclusions Paper (31 March 2026)

    RBA announcement of 31 March 2026: lower interchange caps; most changes including removal of surcharging take effect 1 October 2026.

    rba.gov.au · Accessed
  7. RBA: Review of Merchant Card Payment Costs and Surcharging – Conclusions Paper, Executive Summary

    RBA view that merchants should not have to subsidise benefits such as rewards points; lower interchange caps particularly on consumer credit cards.

    rba.gov.au · Accessed
  8. RBA: Frequently Asked Questions – Removal of Card Payment Surcharges From 1 October 2026

    A number of financial institutions have announced changes to rewards programs, pricing and benefits; these are commercial decisions of individual institutions.

    rba.gov.au · Accessed
  9. Moneysmart (ASIC): Cancel a credit card

    Redeem rewards points before closing a card so you don't lose them.

    moneysmart.gov.au · Accessed
Questions

About this guide

How much is a credit card point worth in Australia?

There is no single value. In the ACCC's worked example, the same 60,000 points were worth about 3.3 cents each on a business class flight and 0.5 cents each on headphones. Work out the value for the redemption you actually plan to make.

Can I turn Velocity Points into cash?

No. Velocity's membership terms say Points don't have a cash value and can't be converted to cash.

Will the RBA's 2026 payment reforms affect my card's rewards?

They may. The RBA says a number of financial institutions have announced changes to credit card rewards programs, pricing and related benefits following its review, and that these are commercial decisions for each institution. Check your issuer's current terms and any notices it sends you.

Is a rewards card worth it if I sometimes carry a balance?

Moneysmart warns that rewards cards can cost more, especially if you don't pay the full balance each month, and suggests a no-frills card with a lower interest rate if you expect to carry a balance.
Keep reading

Balance Transfers, Interest-Free Deals and Buy Now Pay Later in Australia

Card Surcharges in Australia: The 1 October 2026 Changes

Choosing Your First Credit Card in Australia