Qantas Credit Cards 2023 : Is it Expensive for Low-Budget Families in Australia ?

Australia : In This Blog article we will discuss Why Low budget Aussie families are unable to afford the expenses of Qantas Credit Cards 2023 in Australia .

Ever thought why you even need a credit card ?

In a country known for its stunning landscapes and vibrant cities, Australia offers plenty of opportunities for exploration and travel. For many Australians, frequent flyers, or those who dream of jetting off to exotic destinations, having a Qantas credit card can be enticing.

The allure of accumulating Qantas Points and enjoying travel perks may seem appealing, but for low-budget families, the cost associated with such credit cards can be a significant consideration.

Overview of Qantas Credit Cards

Qantas Airways, Australia’s flagship carrier, is renowned for its extensive network of flights, both domestic and international. As one of the leading airlines in the country, Qantas has a loyal customer base that often seeks ways to enhance their travel experiences.

Qantas credit cards are co-branded cards issued in partnership with various financial institutions. These cards offer Qantas Points for every dollar spent on eligible purchases, allowing cardholders to accumulate points that can be redeemed for flights, upgrades, hotel stays, and other travel-related expenses.

Moreover, some Qantas credit cards offer complimentary travel insurance, airport lounge access, and other exclusive benefits, making them attractive options for avid travelers.

Why Qantas credit cards are expensive for low budget families In australia

While Qantas credit cards may be appealing for frequent travelers and those who value the associated perks, they may not be the most suitable choice for low-budget families. The primary reason lies in the fees and costs associated with these cards.

1. Annual Fees

Most Qantas credit cards come with an annual fee, which can range from moderate to high, depending on the card’s benefits and features. For low-budget families already managing their expenses closely, paying an annual fee can be a financial burden.

For example, the annual fee for the Qantas Premier Platinum Mastercard is $295. This can be a significant expense for families on a tight budget.

2. High Interest Rates

Another cost consideration is the interest rate charged on outstanding balances. Qantas credit cards are known to have relatively higher interest rates compared to standard credit cards. For families who anticipate carrying a balance from month to month, the accruing interest can significantly impact their overall debt.

The interest rate on the Qantas Premier Platinum Mastercard is 21.99% p.a. This means that if you carry a balance on your card, you will be paying a lot of interest.

3. Spending Requirements for Points

Accumulating enough Qantas Points to make them worthwhile often requires substantial spending on the credit card. Families on tight budgets may find it challenging to meet the minimum spending requirements to earn enough points for meaningful rewards.

4. Limited Redemption Options

While Qantas Points can be used for various travel-related benefits, families may have limited opportunities to redeem their points for flights or upgrades. Limited availability of rewards can diminish the value of the accumulated points, making them less appealing for families seeking practical and flexible rewards.

5. High balance transfer fees

Qantas credit cards typically charge a balance transfer fee of 2.99% of the balance transferred. This means that if you transfer a balance of $10,000 to a Qantas credit card, you will be charged a balance transfer fee of $299.

6. High late payment fees

Qantas credit cards typically charge a late payment fee of $50. This fee can be even higher if you have a history of late payments.

7. High foreign transaction fee

Qantas credit cards typically charge a foreign transaction fee of 3% of the purchase amount. This means that if you make a purchase in a foreign currency, you will be charged an additional 3% on top of the purchase price.

An Example of the Cost Analysis

Let’s consider an example of a low-budget family in Australia to understand the potential costs of having a Qantas credit card.

The Smith family, a couple with two children, has an annual household income of $60,000. They are considering applying for a Qantas credit card with an annual fee of $200 and an interest rate of 20% p.a. Due to their financial commitments, they estimate that they can only put $1,000 on their credit card each month. The Qantas credit card earns 1 Qantas Point per $1 spent on eligible purchases.

In a year, the Smith family’s spending on the credit card would be $12,000 ($1,000 x 12 months). Considering the annual fee of $200, their total credit card costs would be $12,200 for the year.

If the family carries a balance of $1,000 each month and makes only the minimum monthly payments, they would incur significant interest charges. Over the year, the interest paid would amount to approximately $393.

Taking into account the potential travel benefits and rewards they could earn with the Qantas Points, the Smith family needs to assess whether the value they receive outweighs the cost of having the card.

Pros/Likes of Qantas Credit Cards:

• Earn Qantas points: Qantas credit cards allow you to earn Qantas points for every dollar you spend. These points can be redeemed for flights, upgrades, and other rewards.
• Access to Qantas lounges: Some Qantas credit cards offer access to Qantas lounges at airports around the world. This can be a great perk for families who travel frequently.

• Travel insurance: Some Qantas credit cards offer travel insurance, which can help cover your costs if you need to cancel or interrupt your flight, or if your luggage is lost or damaged.

Cons/Dislikes of Qantas Credit Cards:

• Annual fees: Qantas credit cards typically have high annual fees. This can be a major expense for low-budget families.
• Interest rates: Qantas credit cards also have high interest rates. This means that you could end up paying a lot of money in interest if you carry a balance on your card.
• Other fees: Qantas credit cards also have other fees, such as late payment fees and foreign transaction fees. These fees can add up, so it’s important to be aware of them before you apply for a card.

Read This also : How to choose right credit card In Australia for your lifestyle

14 Reasons Australians Underestimate Credit Card Charges and Fees: Examples and How to Rectify Them

Alternatives for Low-Budget Families

For low-budget families in Australia, there are alternative credit card options that may better suit their financial circumstances and spending habits. Standard low-fee credit cards with no or lower annual fees and competitive interest rates can be more cost-effective for families who do not travel frequently or do not have high monthly expenses.

Here are some examples of other credit cards that may be a better fit for low-budget families:

ING Low Rate Mastercard: This card has no annual fee and no balance transfer fee. The interest rate is 19.99% p.a., which is lower than the interest rate on most Qantas credit cards

Macquarie Platinum Mastercard: This card has an annual fee of $99 and no balance transfer fee. The interest rate is 19.99% p.a., which is lower than the interest rate on most Qantas credit cards

Additionally, families can explore other loyalty programs and rewards cards that offer more versatile redemption options, such as cashback or gift cards. These types of rewards can provide more immediate benefits and financial flexibility, aligning better with the needs of low-budget families.

Tips before getting a Qantas credit cards

Here are some tips for low-budget families who are considering getting a Qantas credit card:

• Only apply for a Qantas credit card if you are confident that you can pay off your balance in full each month.
• Choose a Qantas credit card with no annual fee or a low annual fee.
• Be aware of the interest rate on the card and make sure that you can afford to make the monthly payments.
• Avoid using your Qantas credit card to make purchases in foreign currencies.
• Pay your credit card bill on time to avoid late payment fees.

Conclusion

While Qantas credit cards offer enticing rewards and travel benefits for frequent flyers and travel enthusiasts in Australia, they may not be the most cost-effective choice for low-budget families.

The associated annual fees, high interest rates, and spending requirements may outweigh the value of the rewards, making these cards less suitable for families seeking practical and budget-friendly credit card options.

For low-budget families, it’s essential to conduct a thorough cost analysis, considering their spending patterns, potential rewards, and overall financial goals before deciding on a credit card.

Exploring alternatives with lower fees and more versatile rewards can provide a more suitable and financially responsible solution for managing everyday expenses while maintaining a budget-conscious approach.

Call to action:

If you’re still not sure whether a Qantas credit card is right for you, consider talking to a financial advisor. They can help you assess your individual financial situation and recommend the best card for your needs.

Frequently Asked Questions (FAQs)