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These are some of the benefits of using reward credit cards. Starting with a credit card is a great bonus! We get points for spending money, and in the end, we get a great deal of exclusive reward for it. We used to spend money, so it's exciting to get extra gifts! It all looks nice and elegant, so we look at the exact cost of these prizes.

A free trip to Brisbane may seem like a great bonus to work with, but if you see how much you need to spend on a trip, it may not be. For instance:

• 1 AirCZ MasterCard = Airpoint with $ 120 spent
• Cheap round trip from Dunedin to Brisbane = $ 403 NZ
• Every 1 Air NZ Airpoint is converted into dollars for air travel, which means we need 403 points
• So the cost of 403 air points (403 x 120) = $ 48,360

We have to spend $ 48,360 on our credit card so we can get a free flight to Brisbane only through Airpoint. We can say that our points will never end unless we keep the card open, but that means we have to pay our $ 65 annual fee.

If we are able to pay off our credit card balance every month and we do not have to pay any interest (20.95% per annum) then in reality our trip will only pay the annual card fee ($ 65).

If we divide the advertised travel cost ($ 403) by the annual card fee ($ 65), we will stick to the maximum cancellation period and before that we will have to spend $ 48,360 and earn the required 403 aircraft. To benefit from the cost.

403/65 = 6.2 (six years)

Requires $ 48,360 / 6 = $ 8,060 per year

As long as we spend at least $ 8060 per year on our credit card, we will benefit from our credit card rewards. We don't know that spending $ 48,360 on our credit card just for a trip to Brisbane seems worth it.

We need to outweigh the cost of credit card rewards because, just like carrot-on-horse, additional incentives can motivate us to reach the goal the average young sex wants to achieve. Credit card rewards can cost us more than we expect to earn points for our ultimate goal. We were able to spend the extra $ 10 - $ 20 ourselves just because we were ashamed of the $ 120 we were awarded. We can easily save $ 10 a week spent on earning bonus points in our supermarkets, then paying for your trip to Brisbane yourself. Bonus points are usually not equivalent to the problem they cause, because the value of the bonus money is not proportional to the amount we would have to spend to get it. Credit card providers will initially not offer a reward if they know they will lose money on them. Credit card rewards are a dangerous game because they aim to pay us more money than we have and increase the risk of paying interest at the end of the month.

We need to ask ourselves if we can handle credit cards and if we can pay the balance every month! Some of us use credit cards to improve our credit rating, but there are sure ways to do that, such as making sure we pay our bills every month. Avoid the habit of pushing with plastic to get the treatment you don't need. Responsible borrowing with personal loans and leaving the card at home. Treat your money as money, not treat it as a game.

Credit Union Bayd is traded as NZCU South. The general terms, conditions and loan granting criteria apply. There is a $ 500 approval fee and other home loan fees. Personal Lending is subject to a confirmation fee of $ 250 and other fees. All prices, fees and variable profits are subject to change without notice. Disclosure information for the current product and other information is available here or upon request from the credit union. Credit unions are Bayold savings card stocks that are backed by first class guarantee credit union beasts. Click here http://www.creditcardsnz.co.nz/airpoints-credit-cards/