Credit card perks – when are they worth it?

It’s easy to get disheartened about your finances when you’re an avid reader of personal finance blogs. Like some people might read fashion magazines and quietly compare themselves to the models they see on the pages, I read money blogs and compare myself to people who are either way behind me – the debt bloggers – or, in most cases, way ahead.

But you know what always cheers me up? A chat with my bank.

I remember paying a visit to my local branch years ago toward the end of high school. I probably only had about $4k in my accounts (I never cracked $10k until after graduating university), yet the teller was apparently amazed that I’d saved that much, and asked me what I was saving for.

“Ummm, uni?” I offered, stumped.

You work at a bank, for goodness sake. Is saving for the sake of saving really such a foreign concept?

This month I applied for a second credit card, thinking it would be good to have a backup while we travel that can be carried separately just in case I get mugged or my wallet gets lost. The online process took just a couple of minutes, and was followed up by a call the next day with a few more questions – so you don’t have a student loan? car loan? hire purchase? store cards anywhere? – along with acknowledgement of my strong savings history. Way to boost the ego. (I’ve been with my bank for over a decade, so they’re all up in the intimate details of my financial history – which is pretty vanilla.)

The bank rep also tried to upsell me to a Gold or Platinum Visa. Now that’s something I never thought I’d hear in my life. Say what?

If I booked my flights with one of these premium cards, I’d get free travel insurance. Righty-o. Pity I’ve already booked both – and don’t really want to pay hefty annual fees for the privilege of a shinier credit card.

This got me thinking, though. Putting aside the fact that I just don’t see myself as the kind of person to own a gold or platinum credit card, would it ever make sense from a financial standpoint?

Well, at $80 to $130 a year in annual fees, I think not. In comparison, my humble standard Visa only costs $24 (bank credit cards without annual fees don’t really exist here). According to interest.co.nz, I have one of the best credit cards in regard to annual fees. Given my lifestyle and spending habits, the credit card perks of free travel insurance and the ability to earn reward points marginally faster don’t really appeal.

My needs in a credit card are simple, really: enable me to buy stuff online, rent vehicles, provide an imprint at the odd hotel, and be widely accepted, so I can use it to pay for as many things as possible in order to rack up points. As well as the $24 a year I pay for the privilege of my bank credit card, I also pay $20 to partake in the rewards programme, which earns me more than enough to cover all the fees, as well as pay for a few trips to the movies or a few meals out.

What, if any, perks do you get through your credit cards? And what do they cost you?

14 thoughts on “Credit card perks – when are they worth it?

  • Reply Justin April 18, 2013 at 14:52

    My card doesn’t have any fees so our bonus points really are bonus points. I try to avoid any cards with fees, but really do need to become more savvy about cards and points.
    BTW, you’re not the only person who feels that way when reading PF blogs. I get that feeling all the time, especially when someone has already been out of debt for five years or so.

  • Reply Michelle April 18, 2013 at 15:14

    My cards don’t have fees or they have a very low fee (I think $30 per year). The rewards are worth much more than the annual fee, so why not? I love my rewards cards! πŸ™‚

  • Reply Stephanie April 18, 2013 at 15:41

    I think that you’ve made the best possible choice for yourself. If you’re not going to use the rewards, then why get the card with the higher fee? There are probably people who would actually made use of the rewards; just not you.

    In America, if you manage your money and pay all your bills on time, you can get a credit card with cash back and no fees. Therefore, my credit card company is losing money by offering me a card. But, I guess that there are enough people who wind up with enough credit card debt that the companies are okay with losing money to me.

    To me, what makes the most sense is for there to be a small annual or monthly charge and have the credit card be a convenience that you pay for. But, the world doesn’t work that way. I’ll just enjoy the cash rewards on my card. πŸ˜›

  • Reply Mrs. Pop @ Planting Our Pennies April 19, 2013 at 00:32

    Our cards have no fees to us, and mondo rewards. We got about $1100 in cash back from putting our spending on cards last year. I know we’re reaping the benefits of other people paying interest on their purchases, but I’ll take it!

  • Reply The Asian Pear April 19, 2013 at 02:23

    I have a 1% cashback on all my purchases on credit card. It’s a full cashback. And no fees. I LOVE it! πŸ˜€

  • Reply krantcents April 19, 2013 at 03:47

    I earn frequent flier miles. I use them to travel overseas every other year. I usually fly business or first class. I use my credit card for all my purchases and rack up a lot of miles that way. I still need to use various tricks to accelerate the miles accumulation, but I get much more for my $95 per year fee.

  • Reply Debt and the Girl April 19, 2013 at 04:12

    I have a card that gives up to 6% cash back on purchases so I would say it is very much worth the $75 annual fee. We get cash back every month and use it to pay down the balance. If you know what you are doing, then this can be very beneficial.

  • Reply Morgaine April 19, 2013 at 05:17

    I recently upgraded my airmiles credit card to a Gold card – like you I never thought I’d see the day πŸ˜‰ We were booking a trip for a family wedding using miles. The gold card gives you 25% of the amount of airmiles required for the trip. Since I was upgrading not getting a whole new card, the fee was $49 vs $99. For this we saved 700 airmiles (2800 vs 2100 25%). The average airmile would cost you $20 in purchases or $14,000 for 700 airmiles! So, I think in our situation that $49 was more than worth it πŸ™‚

    But, in your case, I think you made the right decision πŸ™‚

  • Reply Kara April 19, 2013 at 06:03

    I have two credit cards – one in my name and one joined with the husband. The one in my name gives me points per dollar spent and I believe it only costs me about $24 annually. Not too shabby, but it’s a “student” card and comes with a low credit limit. The other card is through a wholesale store and we receive money back annually towards our future purchases at that store. What the cost is, I can’t remember.
    We were recently offered a “better” card that offered travel rewards, but the annual fees were a little crazy (About $150/year plus $70/year for additional cards). Plus, you’d have to do a LOT of spending in order to get enough points to go anywhere worthwhile.
    I find points/rewards cards to be a wash, really.

  • Reply SavvyFinancialLatina April 19, 2013 at 08:20

    We have two credit cards. Well, three if you count the credit card my husband never ever uses. He doesn’t even have a valid plastic card. I have a VISA through my bank, and the rewards are pretty bad, but I really only have the care insurance on it, so we don’t spend that much money on it. No fees.
    Our main credit card is our discover. It’s cash back and no fees. We probably get anywhere from $20 to $35 every month.
    I have used the rewards to buy restaurant gift cards for gifts.

  • Reply SarahN April 19, 2013 at 12:33

    Luckily I have two credit cards in Australia with no fees. And in return they don’t have the best interest rates, but like the PF world, I pay them off weekly (with my pay) so I’m not too concerned about interest rates. I don’t have bonus points or platinum etc, as I don’t think the fees are worth the returns. Congrats to NZ for recent developments with marriage law – gazumped us Aussies again!

  • Reply Living Debt Free Rocks! April 19, 2013 at 14:30

    My cards have no annual fee but come with cash back rewards, program points and covers car rental and insurance. I charge the majority of my monthly expenses on the card to earn the cash back rewards. I also pay my balance in full before each due date so I don’t pay any interest so it’s a win for me. πŸ™‚

  • Reply CF April 19, 2013 at 17:40

    I’ve been meaning to get a cash-back card for bills and groceries, but haven’t gotten around to it yet. Still. My current cards earn me air miles and points for movies. Rewards aren’t great in Canada.

  • Reply Hayley April 20, 2013 at 01:14

    I’m like that bank teller – so impressed with your saving habits! I didn’t become a saver until I left uni and got serious about my future. While at uni I lived very irresponsibly. I can’t imagine how I did it now – I freak out whenever we dip into our savings, even if it’s totally planned.

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