Did last year’s credit-card rewards cover the annual fee?

Start with the fees actually charged

Open the last 12 months of statements and record the card annual fee plus any separate rewards-program fee. Moneysmart says rewards cards can have higher fees and interest rates, and advises weighing the value of rewards against those costs rather than choosing by the points headline.

Keep interest and late fees in a separate row. They are real card costs, but mixing them into the rewards-fee calculation can hide two different decisions: whether the rewards feature covered its fixed fees, and whether carrying the balance cost more. This guide is educational, not personal financial advice. We receive no commission from the official links below.

Source: ASIC Moneysmart — Choosing a credit card · Qantas Frequent Flyer — Terms and Conditions

Value only rewards you actually used

For each completed redemption, record the cash price you genuinely would have paid for a comparable item, then subtract any mandatory cash co-payment. Do not use a promotional points value when the alternative purchase, date or conditions differ from what you would have chosen.

Qantas states that reward availability may be limited, that taxes, fees and charges can still be payable in cash, that points are not cash, and that it does not represent the underlying value of a reward. Those limits are why unused points and unavailable trips belong outside a realised-value total.

Source: Qantas Frequent Flyer — Terms and Conditions · ASIC Moneysmart — Choosing a credit card

Calculate the fee-only result

Illustration only: an AUD 295 annual fee plus an AUD 65 rewards fee totals AUD 360. A voucher you would otherwise have bought for AUD 120 contributes AUD 120. A flight with a comparable cash price of AUD 310 and AUD 95 in required cash charges contributes AUD 310 − AUD 95 = AUD 215. These invented amounts are not current card or reward pricing.

Realised reward value is AUD 120 + AUD 215 = AUD 335. The fee-only result is AUD 335 − AUD 360 = negative AUD 25, so these redemptions did not cover the two fixed fees. If a second completed redemption avoided another AUD 80 purchase, realised value becomes AUD 415 and the result becomes positive AUD 55. The conclusion changes with use, not with the unused points balance.

Source: ASIC Moneysmart — Choosing a credit card · Qantas Frequent Flyer — Terms and Conditions

Separate card cost from reward value before renewal

Check caps, expiry, redemption conditions and whether your ordinary spending pattern is enough to earn the benefit without extra purchases. Moneysmart recommends reading those conditions and comparing the reward value with the fees. Count a lounge pass, insurance feature or other perk only if you used it and would otherwise have paid for a comparable service.

If the card carried a balance, review the interest cost separately before treating a positive fee-only result as a win. Your next step is to save a one-page ledger with fixed fees, completed redemptions, required cash charges and the renewal date; leave unused points at zero until they are actually redeemed.

Source: ASIC Moneysmart — Choosing a credit card · Qantas Frequent Flyer — Terms and Conditions

Changes to this guide

9 October 2026: First publication after ASIC and issuer-term review, six arithmetic replays, additional-redemption counterexample and cross-network originality screening.