FED: Credit card reward programs can have hidden costs

AAP General News (Australia)
04-13-1999
FED: Credit card reward programs can have hidden costs

A new consumer survey has found many people are losing out by changing their spending
habits because of credit card reward schemes.

Choice magazine says many people wanting to earn bonus points are not considering the
trade-offs of the schemes attached to credit and charge cards, airline and other loyalty
programs.

The magazine has found the key to making reward programs work is to ensure they don't cost
more money than what a consumer would normally pay.

It says if consumers are spending more on accessing programs than claiming rewards, they
would be better off saving their money.







Choice says shoppers should choose schemes that are cheap, flexible and accessible, and
consider any restrictions, conditions, interest rates, joining fees and lifespan before
signing up.

Many airline reward programs have hidden conditions, and some have exorbitant joining and
annual fees.

Consumers should also be aware of the extra two to four per cent interest fee payable each
time such credit cards are used.

AAP RTV ji/sb/lw/nd

KEYWORD: REWARDS (SYDNEY)

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