When you hear the word “hacker”, you probably don’t picture someone like Brandon Loo. But if you ask Loo, a mild-mannered 30-year-old from Perth who originally trained in allied health, if he’d describe himself as a hacker, he’ll say: “Definitely.”
Loo is one of a few people in Australia who have made careers out of teaching people how to “hack” credit cards to accrue as many reward points as possible. He spends four days a week working for the guide website Points Hacks, waking up early because its office operates on Melbourne time. You can get a “really good experience”, Loo says, such as a first class Emirates flight from Sydney to Christchurch with à la carte dining and an onboard shower “for only 64,000 points”.
The desire to win in the credit card points game, to get something exciting, virtually for free – with a little skill and a little hustle – has spawned online communities, created guru influencers and yielded thousands of comments on forums the world over.
Steve Hui, who runs iFLYflat and has embraced the moniker “the Points Whisperer” – given to him by the Sydney Morning Herald in 2014 – travels the country advising business owners to accrue points by paying their expenses with certain cards. He once helped someone in trucking get 30m points, he says. “It’s just a feeling of, ‘Wow, you found a way to get something that’s really expensive that otherwise you need to be wealthy or successful to have’.”
You can get 100,000 frequent flyer points – or more – as a sign-up bonus for certain credit cards. If you were to use, say, two a year, Loo says, you’d have enough to fly business class to Europe, once you found the seats.
“I got about 600,000 Qantas frequent flyer points in about a year-and-a-half,” says a Melbourne office worker, who “churns” credit cards by paying business expenses with them and who asked not to be named.
“You’re effectively arbitraging a significant amount of money – it’s a no-brainer,” they say. They say you aren’t really doing over credit card companies “because they’re getting the annual fee regardless. You’re just playing the system … you’re sticking it to Qantas more than anyone”.
It sounds amazing. But is it too good to be true?
More than one in three Australians applied for their last credit card to earn reward or frequent flyer points, according to the comparison website Finder, making it the second-most common reason people got a card – after “for emergencies”.
There were about 12m active credit cards in Australia in January. Apart from a brief uptick in 2023, the number of cards in use has steadily declined since 2019. Finder’s Angus Kidman says responsible lending rules have been tightened and younger people have turned to buy now, pay later platforms. He says, however, that credit cards are still a “good profit centre” for banks, and points are the main way they attract new customers.
According to Finder, Australia’s more than 12m credit cards have netted a national debt of $19.8bn dollars, which is accruing interest.
A decade ago, the federal parliament held an inquiry into credit card interest rates. It heard that low-income credit card users – those most likely to take out cards “for emergencies” – were more likely to pay interest and have higher amounts of credit card debt relative to their income.
The inquiry’s final report explained the distinction between “revolvers” – those who have to pay interest on their cards – and “transactors” – those who typically pay off their cards in full. A recent piece in the Atlantic suggested that, in the US at least, poorer “revolvers” are subsidising the travel bonuses and other perks accrued on the credit cards of the rich.
Not for the ‘faint-hearted’
“Credit card companies are not charities,” says Sally Tindall, the data insights director at financial comparison website Canstar. “They’re not handing out things for free without being able to recoup costs at the other end.”
The “credit card points game” is not for the “faint-hearted” Tindall says.
“If you’re laser focused, if you’re a big spender on a card, if you are continuously shopping around for a competitive deal, if you’ve read every inch of the fine print and you can follow it in order to make sure it comes out to your advantage, there’s a chance that you might come out ahead,” she says. “That, for probably the majority of people, seems like a great idea initially, but then eventually becomes all too hard and sometimes all too costly.”
For example, American Express is offering credit cards to new customers with 50,000 Qantas frequent flyer points as a sign-on bonus, as long as you spend $5,000 on “eligible purchases” within the first three months, which includes most transactions. You can then earn between 1 and 1.25 Qantas points for every dollar spent. It sounds great. But the card comes with an annual fee of $450, and you have to make sure you pay it off in full each month to avoid an interest rate of 23.99% a year.
Loo, who runs a blog called The Points Wanderer, acknowledges there are “a lot of caveats” to credit cards, especially with sign-up bonuses. “It’s a financial product, and if you don’t use it well, you will end up with debt, which really negates the whole point of point hacking,” he says. He also acknowledges it can be difficult to book flights on points, especially during peak travel periods.
But, he says, “I just love the idea that points can take me pretty much anywhere in the world, in style and comfort.” He and his partner apply for two cards each per year. He says he doesn’t “go crazy” and he wouldn’t advise anyone to.
“I think it’s important to be careful how often you swap cards, because people who do it too often can get flagged with their credit reports that they constantly sign up for cards, and that can have a negative impact on your future borrowing.”
Potential liability
This idea – known as credit card “churning” – involves opening several credit card accounts to take advantage of introductory offers, bonuses and rewards, according to a Reddit thread dedicated to the practice in Australia. Here, people ask for advice on things such as when to cancel their cards, if they can reuse cards with their partners and, in some cases, how they should best spend the hundreds of thousands of frequent flyer points they have accrued.
Credit card “churning” isn’t illegal in Australia but, as the Reddit thread warns, it “also comes with risks and considerations”.
Kevin James, the chief solutions officer at credit reporting agency Equifax, says credit card churning can negatively affect your credit score because of the potential liability recorded on your file, which can reduce the amount a lender would be willing to lend if you were to, say, take out a mortgage.
“You certainly do run the risk of impacting your ability to borrow on mortgages and impact your credit score if your file is aggressive on churn,” he says. “A lender might take into consideration if someone has, say, five credit cards.”
Adele Eliseo, the publisher of The Champagne Mile frequent-flyer website and a self-described “points maximiser”, is reluctant to speak publicly about credit card “churning”, in part because of the affiliate partnerships she has with credit card companies.
However, she will say “card providers are getting increasingly savvy about people who do this, and they are modifying their algorithms to [take] into consideration the patterns of people who are taking out cards, and it’s not a guarantee that you can get approved for something if you’re highly active with churning.”
There are also dozens of listings for frequent flyer points on eBay, for seemingly arbitrary prices. One seller is offering 100,000 Qantas points for $1,800; another is offering the same amount of points for $3,400. As a Qantas spokesperson says, the selling or purchasing of points “through unauthorised channels” is against the terms of its program.
When it comes to doing things “by the book”, Eliseo says it’s important for people to look beyond sign-up bonuses and consider the ongoing earn rate per dollar.
So, is it worth it? Prof Angel Zhong, a finance expert from RMIT University, says if used “properly”, credit card points can translate into “considerable savings” on travel, or even on everyday expenses such as groceries and petrol if you use a card that offers discounts. You can also build a good credit history if you play by the rules, she says.
Ultimately, it comes down to your financial literacy, Zhong says. “If someone isn’t a frequent traveller or really good at managing money, the risk can really outweigh the benefits.”
