Building a portfolio of credit cards for maximum frequent flyer points

TRAVEL STRATEGY | Using credit cards responsibly is a great way of racking up frequent flyer points – but if that’s your ultimate goal, having several different cards in your wallet could get you there even faster.

For example, a common strategy is to use a high-yielding American Express card wherever it’s accepted, and to keep a backup Visa or MasterCard in your wallet for where it’s not.

Many credit cards also award bonus points on certain transactions, such as when paying for flights, visiting the supermarket or dining out, which is where it pays to shop wisely.

Once you’ve picked your preferred airline, here’s how to optimise the frequent flyer points you earn on credit card spend.

Choose your everyday American Express

On everyday American Express transactions, we’d expect no less than 1.5 Qantas or Virgin Australia Velocity Frequent Flyer points per dollar spent – any fewer and you’re falling short of your frequent flyer potential.

NAB’s Qantas Rewards Premium and Velocity Rewards Premium cards fit the bill nicely, reeling in that full 1.5 frequent flyer points in each respective scheme at a cost of $250 and $150 each year, respectively.

You’ll also get free travel insurance, extended warranty cover on your new appliances, protection against lost, stolen or damaged purchases and more (conditions apply).

That, combined with the value of the points you’ll pick up along the way, will more than cover the card’s annual fee.

Choose your everyday Visa or MasterCard

NAB’s Premium Rewards cards come with both an American Express and a Visa on a single credit card account, yet the earning rate on the latter is a mere 0.5 points per dollar spent.

If you regularly find yourself reaching for your backup card where your prized earner isn’t accepted, invest in a solid Visa or MasterCard that pockets at least one point per dollar spent.

You’ll find that on the Woolworths Money Qantas Platinum MasterCard for $139 each year and the Virgin Australia Velocity Flyer Card for $129 p.a.

Rather than using a NAB Visa for just half a point per dollar, whip out either of the above to double your points haul on every transaction.

Choose your credit card for spending abroad

International travel is a great way of notching up point after point, yet it doesn’t end at baggage claim.

Rather, the HSBC Qantas Platinum Visa dishes out an impressive two Qantas Points per Aussie dollar spent overseas, while the Bankwest Qantas Platinum MasterCard awards 0.75 points on the same outlay.

Setting them apart is the international transaction fee – HSBC levies 3% on all purchases, while Bankwest waives this fee for its Platinum cardholders.

In other words, you’re effectively ‘buying’ Qantas Points for 1.5c each from HSBC and zero cents, or free, via Bankwest, atop respective annual fees of $199 and $160.

Occasional international travellers needn’t worry with a dedicated card – everyday Visa, MasterCard and American Express plastic generally earns at the same rate wherever you swipe, although be mindful of any international transaction fees that may apply.

Choose a card for where you spend the most

Are your credit card statements littered with airfare purchases, restaurant charges or grocery and petrol costs? Chances are, there’s a credit card for that.

Take a look at this dynamic duo from American Express – the Qantas American Express Ultimate Card and the American Express Platinum Edge – which have terrible earning rates on everyday spend but make up for it through bonus points on specific transactions.

For example, the Qantas Ultimate card pulls in a whopping three points per dollar on Qantas flights, Qantas Club membership and restaurant spend, plus two points per dollar with other airlines, travel agents and when overseas against a $450 annual fee.

In a similar way, you’ll earn three frequent flyer points per dollar at supermarkets and two frequent flyer points per dollar at petrol stations for $195/year via the Platinum Edge, which could be handy for larger households that spend heavily in these categories.

Minimise annual fees: avoid similar credit cards

You’ll save on fees by taking the best card from each category above, finding where they overlap in features and earning rates and ditching those that become redundant.

From our top picks, the HSBC Qantas Platinum Visa not only earns two points per Aussie dollar spent abroad, it also nets one point per dollar on home soil, doubling as an ideal card for overseas spend and as your everyday non-AMEX card in Australia for a single annual fee.

Likewise, NAB’s Qantas Rewards Premium American Express has its impressive 1.5 points per dollar earning rate and delivers an enviable 2.5 points per dollar when booking Qantas flights or paying for Qantas Club membership with the card.

From our example, you’re left with just two credit cards – NAB Qantas Rewards Premium for your everyday spend and for booking Qantas flights, and the HSBC Qantas Platinum Visa to use where AMEX isn’t accepted at home and for every transaction abroad.

Our final tips

While the cards highlighted above can be used as part of a general frequent flyer strategy, they won’t necessarily suit your particular needs – so be sure to do your own research and make your own decisions before pulling the trigger and applying for a new credit card.

It’s also best to pay off your credit card in full each and every month to avoid any interest charges, as these quickly negate any value you could derive from your frequent flyer points.

Finally, be mindful of any points capping arrangements that may apply to your selected credit card – which can limit or even halt what you’ll earn each month or year despite the advertised per-dollar earning rates.

What’s your credit card strategy? Do you rotate between several different cards, or use one all-purpose card to keep things simple? Share your strategy with others in the comments section below!

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Chris C.

Chris is a a former contributor to Executive Traveller.