Is an Airpoints Credit Card Worth the Annual Fee?
Airpoints credit cards are a popular choice for frequent flyers and those looking to maximise their spending rewards. These cards allow you to earn Airpoints Dollars™ on everyday purchases, which can be redeemed for flights, upgrades, and other travel-related expenses. However, with annual fees attached, it’s important to assess whether the benefits outweigh the costs. Here’s a detailed look at whether an Airpoints credit card is worth the annual fee.
Understanding Airpoints Credit Cards
Airpoints credit cards offer a way to earn rewards on your spending, which can be used for a variety of travel-related expenses. The earn rates and benefits vary depending on the card type and issuer, with options available from major banks like ANZ, Kiwibank, and Westpac, as well as American Express.
Key Benefits of Airpoints Credit Cards
- Earn Airpoints Dollars: You can accumulate Airpoints Dollars with every purchase, which can be redeemed for flights, upgrades, and other travel perks. For example, the American Express Airpoints Platinum Card offers a competitive earn rate of 1 Airpoints Dollar for every $70 spent.
- Status Points: Some cards also allow you to earn Status Points, which contribute towards your Airpoints membership tier. Higher tiers offer additional benefits, such as lounge access and priority boarding.
- Travel Perks: Many Airpoints credit cards come with additional travel benefits, such as complimentary travel insurance, access to airport lounges, and discounts on Koru membership fees.
- Sign-Up Bonuses: Some cards offer attractive sign-up bonuses, such as bonus Airpoints Dollars when you meet certain spending criteria within the first few months.
Costs to Consider
- Annual Fees: Airpoints credit cards typically come with annual fees, which can range from $50 for basic cards to $195 or more for premium options. It’s important to calculate whether the rewards you earn will offset these fees.
- Interest Rates: These cards often have higher interest rates compared to non-rewards credit cards. If you carry a balance, the interest costs can quickly outweigh the benefits of earning Airpoints Dollars.
- Spending Requirements: To maximise your rewards, you’ll need to use the card for most of your spending. If your spending habits don’t align with the card’s earning structure, you might not accumulate enough rewards to justify the fee.
Is It Worth It?
To determine if an Airpoints credit card is worth the annual fee, consider the following:
- Calculate Your Break-Even Point: Determine how much you need to spend to earn enough Airpoints Dollars to cover the annual fee. For example, if a card requires $10,875 in spending to break even on a $145 annual fee, assess whether this aligns with your typical spending habits.
- Evaluate Additional Benefits: Consider the value of additional perks, such as travel insurance and lounge access. If you frequently travel, these benefits can add significant value and justify the annual fee.
- Assess Your Travel Goals: If you regularly fly with Air New Zealand or its partners, the ability to earn and redeem Airpoints Dollars can enhance your travel experience and provide savings on flights and upgrades.
An Airpoints credit card can be a valuable tool for frequent travellers and those who can maximise their spending rewards. However, it’s crucial to weigh the annual fees against the potential benefits and ensure that your spending habits align with the card’s earning structure. By carefully evaluating your options and considering your travel goals, you can determine whether an Airpoints credit card is a worthwhile investment for your financial and travel needs.