If you fail to pay off your credit card each month or are a low spender, then chasing credit card rewards may be pointless, according to a survey.
Canstar New Zealand, which compares interest rates and star ratings for home loans, credit cards and savings accounts, rated 39 rewards programmes across 51 credit cards at two levels of annual spending: $24,000 and $60,000.
The survey found consumers fall into the traps of spending more to earn extra points or paying interest on their rewards.
"If you can't pay off your credit card in full each month, you will not only pay a higher interest bill but you will gain no benefit whatsoever from reward points," Canstar national manager Derek Bonnar said.
"You are better off with a low-fee, low-interest rate card to help keep your budget in the black."
Canstar surveyed two different rewards categories, general cash/vouchers and frequent flyer points.
It found customers spending about $24,000 a year should opt for rewards programmes that offer cash, shopping vouchers and frequent flyer points, though warned they needed to watch out for the cards' annual fee and points expiry dates.