Credit Card Points Caps Thresholds

LemonShapedRock on 23/08/2022 - 20:32

Hey everyone,

For context, I have a credit card that earns 1 point for the first $10,000 per month then 0.5 points per $ thereafter and need to make a payment of $20,000. (It's a CBA credit card if that helps)

My month to date spend will be less than $5,000 at the time of putting through this payment.

Even though the $20,000 will take me over the $10,000, because it's a single transaction and at the time I'm still in the 1 point per $ bracket will it:
1. Treat the $20,000 at the full points rate
2. Treat the $20,000 in half 1 until $10,000 then .5 for the remainder
3. Treat the full $20,000 as .5 as it the transaction takes me over the $10,000

I'm trying to workout whether it's worth the surcharge to put the payment through on the card vs a bank transfer.

Thanks everyone!

Financial

Comments

  • SF3 on 23/08/2022 - 20:48
    +1

    Treat the $20,000 in half 1 until $10,000 then .5 for the remainder

    ^This, I reckon.

    I'm trying to workout whether it's worth the surcharge

    Surcharge probably cost more than what the points earn? Could be false economy thinking…

    • CaptainHoltisDad on 23/08/2022 - 20:55

      Don't really see how it would be worth it to cop the surcharge. 2 CBA award points can be exchanged for 1 Velocity point so the conservative valuation is 0.5cents per CBA point. If the surcharge > 0.5%, you're behind, and that's for the first $10k only. Depends on your personal points valuation though and whether the surcharge is tax deductible (takes the edge off a bit).

      • LemonShapedRock on 23/08/2022 - 20:58

        Option 1 works for my calcs, option 2 and 3 don't make sense for me to go ahead with purchasing on the card

  • LemonShapedRock on 23/08/2022 - 20:56

    Thanks, I'm hoping it

    Normally yes I'd agree with you, most surcharges eat away at any reasonable value.

    In this case the surcharge its very low (0.5%), and exceeds my points per dollar value I'm getting redeeming Business Class travel.

  • Transient on 23/08/2022 - 21:03
    +1

    I would take out two or more new credit cards which have bonus points and spread the $20k over these cards to meet the minimum spend and put the balance on your existing card.

    • LemonShapedRock on 23/08/2022 - 21:17
      +1

      Great idea! The value in CCs these days is in the sign up bonuses at the moment

      • Transient on 23/08/2022 - 23:15

        True but also depends if you can actually split the expense over a few cards. Some vendors don't allow that. Good luck!

  • SmiTTy on 24/08/2022 - 01:16

    You really can't split the transaction? You could work out when your statement date is and do one 10k on the last day of your statement day, then 10k the following day which would be considered new month

  • jellykingdom on 24/08/2022 - 09:30

    My rule of thumb is that points are worth around 100-150pts per $1 - correct me if i'm wrong here people. Obviously that depends on what you're spending them on

    If you aren't getting as many points as the surcharge, then there's your answer

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