Australians hunting for a financial windfall can still access generous credit card sign-up bonuses despite a wave of annual fee increases and benefit cuts from major providers, but a finance expert is cautioning that rewards cards come loaded with conditions that can quickly erode their value.
The warnings come as banks respond to the federal government's crackdown on card surcharges, with some providers scaling back perks while continuing to compete aggressively for new customers. That competition, experts say, is keeping sign-up bonuses alive, for now.
What Credit Card Rewards Are Still on the Table
A data insights director at financial comparison firm Canstar told a breakfast television program this week that rewards points remain a genuine opportunity for consumers prepared to do their homework.
"Australians love rewards points and it is a viable option if you're homing in on sign-up points, because banks still need new business to come in the door," she said.
According to Canstar's current database, Westpac's Altitude Rewards Black card is leading the field for rewards points, offering eligible new customers 200,000 points worth approximately $680 in gift cards.
"That's a pretty big windfall," the expert noted.
For those chasing frequent flyer points rather than gift card value, Westpac is also offering up to 150,000 frequent flyer points to new cardholders, while American Express has promotions of up to 120,000 points available.
The broader context is relevant here. As debate continues over the government's credit card surcharge ban and its flow-on effects for consumers and businesses, card issuers appear to be leaning on sign-up incentives as a key competitive tool.
The Traps Hidden Behind the Headline Bonuses
Despite the appealing figures, the expert issued a clear warning: "Credit cards are littered with traps."
One of the most significant changes is that many banks are no longer paying out sign-up bonuses in a single lump sum. Instead, points are often delivered in instalments spread across 12 months. This structure means customers may end up paying two full annual fees before they receive all the points they were promised, and some of those annual fees reach as high as $1,200 per year.
Minimum spending thresholds present another hurdle. Cardholders must typically reach a set spending amount within a defined period to unlock any bonus points at all.
"For the Westpac card, it's $6,000. If you can't meet that, you're not getting those sign-up points at all," the expert said.
She suggested that customers looking to hit the threshold consider putting larger regular expenses, such as council rates and utility bills, on the new card. However, she stressed that reading the full terms and conditions carefully was essential before signing up.
This mirrors broader warnings consumers have received in other financial contexts. Changes to how credit card payments are handled have already created friction across the financial system, making it more important than ever for Australians to understand the full cost of any card product they choose.
Rewards Cards Are Not for Everyone
Perhaps the starkest advice from the expert was directed at Australians who regularly carry a balance on their credit cards and pay interest on that debt.
"If you're carrying around a debt on your credit card, rewards cards are not for you," she said flatly.
She urged those cardholders to abandon rewards products entirely and instead seek out low-interest rate options, warning that accumulating interest charges can rapidly wipe out any value gained through points or bonuses.
"You need to sail that card down the river and look for low-rate options. That is critical," she said.
For disciplined spenders who can meet minimum thresholds, pay their balance in full each month, and absorb potentially steep annual fees, rewards credit cards can still deliver real value. For everyone else, the fine print may cost more than the bonus is worth.
