Why I paid $10 more to earn credit card points on a Qantas flight

Sometimes, a card payment fee is worth it to earn more frequent flyer points. Here's how I worked it out for a recent flight booking.

With family living interstate, I'm used to booking flights online.

I find paying by card is the easiest option, even though it adds to the total cost.

While card payment fees are typically worth between 0.3% and 1.5% of airfares in Australia, they can be higher depending on the airline and the card.

A higher airfare also means a higher card fee.

But I also have another incentive to pay by card: my credit card earns Qantas Points, including 1 additional Qantas Point per $1 on Qantas flights (and other eligible spending with Qantas).

So when I recently booked a trip to visit family, I decided to check whether paying the card fee was worth it based on how many Qantas Points I'd earn.

Card payment fee vs Qantas Points calculation

For simplicity, I only considered the points I'd earn for paying with my credit card (not the ones I'll get for flying).

Qantas calculates the card payment fee as a percentage of the ticket price before GST, so here are the key details I considered:

• Card payment fee: $10.18
• Qantas Points earned: 2,202

Based on these details, I would need to get at least $11 value from the Qantas Points I earned to justify the surcharge.

Qantas Points don't have a fixed value but Finder analysis shows that 1 Qantas Point is typically worth between 0.3 and 8 cents depending on how you redeem them.

That gave me a baseline for my calculations: I'd need to get a reward that offered at least 0.46 cents value for each Qantas Point.

This is very achievable considering my focus is on flight rewards, which usually offer at least 1.4 cents per Qantas Point.

For example, Finder analysis shows a return economy reward flight between Sydney and Melbourne has a value of $19.31 per 1,000 points.

If I put the 2,202 Qantas Points I earned from my flight booking towards this reward, they'd have a value of around $41.52.

And even if I redeemed my points for a La De'Longhi Lattissima One coffee machine, I'd get $11.50 value from these points.

So with that in mind, I was happy to pay the surcharge to earn these Qantas Points.

5 details to keep in mind

1. Card payment fees for airlines in Australia are typically worth between 0.3% and 1.5% of the airfare, but can be more depending on the airline and the card.
2. Any business in Australian can charge a fee to cover the cost of processing card payments, but it must be for a reasonable amount.
3. A higher card payment fee won't always be worth it.
4. The amount of points earned for the payment won't always be worth it.
5. If you don't have a reward in mind, using a payment method that doesn't have a fee might offer you better value in the short-term.

It's not always worth it to pay a card fee for the potential points, but keeping these details in mind can help you figure out when it is.

In my case, the fee was worth 0.89% of my Qantas flights and I decided the additional Qantas Point per $1 earned with my credit card made it worth it.

Without that, I probably would have used a debit card (which attract lower fees).