Jazmin Hermione has been paying for her rent using a credit card to boost her frequent flyer points, but the strategy won’t work for everyone. (Source: Supplied)
An Aussie renter has gone viral online for sharing the little-known way she is boosting her Qantas frequent flyer points. A finance expert has warned the technique won’t work for everybody, and you’ll need to make sure the benefits outweigh the fees.
Jazmin Hermione rents an apartment on the Gold Coast with her partner for $770 per week. But instead of paying their rent via direct debit or electronic transfer, the 21-year-old childcare worker told Yahoo Finance she used her credit card.
The couple have a credit card that earns one Qantas frequent flyer point for every dollar spent and has been putting nearly all of their regular expenses on it to help boost their points. The card has a $420 per annum annual fee.
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“Our rent is our biggest expense, so it was kind of a no-brainer to try and figure out a way for it to come off our credit card,” Hermione said.
After doing some research, Hermione found she was able to pay rent with her credit card using the third-party company RentPay. The platform charges a 0.99 per cent fee, which means their rent costs around $777 per week.
Hermione stressed that the points-earning method only worked because she and her partner paid off their credit card bill each month in full.
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Hermione and her partner have 155,000 Qantas points so far and are hoping to use them for a flight overseas. (Source: Supplied)
“A very big rule in the house is as soon as it comes in, we’re paying it straight off because obviously we don’t want to go into debt or have to pay interest on it,” she said.
“It can be quite dangerous, in my opinion, if I’m not on top of it. So when getting the card, I was very adamant about putting systems in place, so we’re always on top of it. We’re never maxing it out.”
Since getting their credit card mid-last year, the couple have racked up about 155,000 points and they were able to get bonus points when they signed up.
Many real estate agencies will offer third-party platforms through which tenants can pay their rent. Common platforms include RentPay, DEFT, Pay.com.au, Rental Rewards, and Sniip.
Finder personal finance expert Sarah Megginson told Yahoo Finance paying your rent with a credit card could be a good way to boost your frequent flyer points for some, but there were risks to be aware of.
“Obviously, the big risk there is that if you don’t pay the credit card balance in time, you’re going to pay a huge whack of interest,” she said.
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“That is the biggest concern I would have with this strategy. You should only be considering it if you have the cash to pay your credit card in full each month.”
If you don’t pay your credit card off in full each month, that’s where you can “easily get into trouble”.
Megginson said credit card interest rates were usually between 20 and 24 per cent, so it could be a “huge premium” on your rent.
At 0.99 per cent, Megginson said the card fees in Hermione’s case were in line with standard credit card fees. But it’s important to be sure the added costs were outweighed by the value of the points.
“If you’re spending say $500 on rent over the year, that’s $26,000. If you had a credit card that earned one point per $1, that would be 26,000 points,” she said.
“At 1 per cent, that’s going to cost you $260 in fees, but 26,000 points should get you more than $260 worth of value.
“26,000 points would be enough for a business class flight between Brisbane and Melbourne, or it would be three economy flights between Brisbane and Sydney.”
Megginson said it was important to have a plan for what you wanted to redeem your points for.
“The real caveat with points is they can offer extraordinary value, but they can also be hard to redeem,” she said.
Megginson urged Aussies to do their own research into the strategy to make sure it would actually work out for them.
Hermione and her partner are hoping to use their Qantas frequent flyer points to book flights overseas to either the US or Japan.
“Travelling is definitely a very big priority between me and my partner,” she said.
“We try to go travelling every year, so we honestly are just trying to make it as cheap as possible to make that feasible for us.”
The couple puts most of their everyday expenses on their credit card to help earn points, except their electricity bill as they found the surcharge for paying by credit card outweighed the points that could be earned.
They also collect Everyday Rewards points at Woolworths and convert them into Qantas points.
Hermione said a credit card wouldn’t be appropriate for everyone and encouraged people to make sure the strategies they have were right for their circumstances.
In speaking about her situation, she said she hoped to break the “taboo” surrounding money and how people are improving their financial situation.
Disclaimer: The information contained in this article is general in nature and does not take into account your personal objectives, financial situation or needs. Therefore, you should consider whether the information is appropriate to your circumstances before acting on it, and where appropriate, seek professional advice from a finance professional.
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