Which Credit Card Should My Friend Sign up to for Maximum Value?

My friend/colleague is working full-time at a post-graduate role and he currently lives at home in Western Sydney. He has never used credit cards but he has signed up for the Westpac and Commonwealth Credit cards to make use of their promotional cashback schemes at the time.

He doesn't pay very many bills, only his partner's car finance, internet & phone bills which works out to be about $200/month. His luxury expenses per month work out to be what he believes to be around ~$400/month (this is including days where he eats dinner out of home). He wants to use these expenses on a long term credit account so he can rack up some reward points.

His main question is whether or not he should get a Credit Card, and which Credit Card product should he sign up for that gives decent rewards in the long term? So far he has considered a Citibank Rewards account or an Amex account.

Some other factors to consider are:

  • He doesn't travel overseas frequently and at this point in time only travels internationally for leisure.
  • His travel expenses work out to be about ~$75/week to go to and from work.
  • He has no issues paying any debts and he generally pays all his current bills on time with no issues.
  • He works in the IT industry

If we could get some insight from the OzBargain community, that'd be super helpful.

Poll Options

  • 0
    Citibank Rewards
  • 2
    AmEx
  • 1
    Other
  • 12
    Don't get a credit card

Comments

  • +17

    you sure know a lot about your friend's circumstances…

    • lolololololol

    • To clarify, my friend was sitting across from me while I typed this up. He's a self-proclaimed "OzBargain lurker" and doesn't actually have an account at this point in time.

    • Because OP is "his friend"

  • luxury expenses per month work out to be what he believes to be around ~$400/month

    Do your "friend's" luxury expenses you speak of include items related to your username? :)

    • +1

      Not for his luxury expenses, but it would be for mine :)

      • +1

        We can be friends now. haha!

  • Check the financial section or pointhacks for the best current deal for CC, either one that gives you Qantas FF or Velocity FF. Try and avoid CC with annual fees, sign up, meet the minimum spend, get the bonus point, cancel CC, repeat with a different one.

    • Thanks for the response! Would cancelling frequently have an impact on your credit score or is that some sort of urban myth?

      • Be mindful that there's a whole new set of reporting rules coming in from 1 July. I don't know all the details of it, but it's supposed to be "comprehensive" reporting.

      • Not sure, some people say you do, some other say you don't. If you always pay correctly I don't see why it would. They could still refuse your application for non-credit reason I guess, but most cards exclude applicants that had the same card in the 12 months prior.

        I mean, I guess they all know that you sign up to these cards for the bonus points. They just want you to use their card for a while, meet the minimum spend and then they probably hope that you forget to pay it back and start charging you interests.

  • As a general rule, you don't rack up many reward points at all from daily spend, it is almost all from sign-up bonuses. Unfortunately (well fortunately really) your friend is going to struggle to meet the required spend to get most of the sign-up bonuses, so I voted don't bother.

  • If his income is sufficient, get an Amex card with 100k or more bonus points, Velocity, Qantas or Explorer card (all around $65k income p.a). Then before 12 months is up for the next annual fee, convert to fee free Amex or the Platinum Edge.

  • Is this friend willing to pay annual fees or do they want to avoid them as much as possible to earn at least some points?

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