Frequent Flyer Australia – Is it Worth The Hassle?

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Anybody else getting a little overexcited?

On the way to work recently, I was listening to the radio (old skool) when my eyes welled up. The radio had announced the lifting of the international travel ban (well sort of). And I can suddenly see the light at the end of the tunnel.

COVID-19 is not over, in fact for me as a doc in a regional town, it has not even begun. But like many immigrants, the worry that I may never see my parents again has been weighing heavily on my mind. The ability to travel again (sometime in the next few months) has renewed hope.

If you are looking forward to the option of travel as much as me, perhaps you are wondering about Frequent flyer Australia schemes?

What are Frequent Flyer Points

Retailers offer Frequent flyer points to incentivize customers to purchase more, develop brand loyalty and share their data.

There are so many companies offering frequent flyer points, it can become very confusing.

The airlines Qantas and Virgin, as well as the supermarkets’ Coles and Woolies, are the major players with the biggest benefits.

How to Start Collecting Frequent Flyer Points

Frequent flyer schemes can seem excessively complex, and it’s hard to know where to start.

It’s actually simple to get started. If you are flying even occasionally and shopping for food you may as well collect these points. The cost is built into the price of the products you are purchasing!

In around 30 minutes you can sign up for the two major airlines, Qantas and Virgin Australia as well as the two main supermarkets, Coles and Woolworths.

You can sign up for a free Qantas membership and Velocity here.

If you ever shop at Coles, Kmart, Target, Coles express, First choice Liquor market or Liquorland sign up for flybuys here. If you ever shop at Woolworths, Big W, BWS, Caltex sign up for a free Woolworths Everyday Rewards card.

Given all of these can be joined for free, signing up is a no brainer. You can even store the virtual “cards” on your phone. Even if you don’t collect a substantial number of points, you can still collect the odd $10 off your grocery shop.

How do you Earn Points

If you just swipe your card at every shop and pay no more attention, you will collect a few points.

With a tiny bit more effort, you can significantly improve your points collection game. Families, in particular, tend to spend a lot on groceries.

Utilise Offers & Bonuses on Grocery Shops

This has the potential to multiply points earned on grocery shopping. Download the flybuys or Everyday rewards app to your phone, check the app and activate offers before a shop. Don’t be tempted to buy items because of bonus points, or spend more than you would normally.

But you can alter the timing of Longlife purchases because the app is offering a particularly generous bonus if you spend a certain amount.

Get a Grocery Rewards Card for Each Adult and Don’t Link

Those with two adults in the household can apply for a fly buys account each.

The supermarkets will offer you bonus points to incentivize you to spend slightly more than you regularly do.

Having two accounts will mess this up. You can alternate accounts depending on who is shopping or even purposely use the account with the best offers.

Collecting Flybuys

Flybuys offers members offers every week, ranging from a bonus 50 points to buy a particular item, to tens of thousands of points for spending a certain amount in a week.

I ignore the “buy this item for a piddly bonus” offers. You can activate them if it’s an item you were going to purchase anyway but it’s not going to move the needle much.

The offers you don’t want to miss out on are the bonus 10,000 points + for a big shop. If you are doing a big shop anyway, you want to activate these before you go. This just involves checking the flybuys app just before a shop, and activating any relevant offers.

Flybuys points can be converted to cash to discount your grocery shopping, redeemed as “flybuys dollars” for travel or convert to Velocity points. There are a variety of flybuys rewards, but these don’t offer nearly as much value.

Flybuys don’t expire if you earn or redeem points in a 12 month period.

Collecting Everyday Rewards Points

Everyday rewards points can be used to discount groceries or transfered to Qantas for flight redemptions.

You can download the Everyday rewards app to your phone, and recieve boosters. It is worth checking the app prior to your shop. Again, boosters are variable in value offered.

Everyday rewards don’t expire as long as you earn or redeem points within 18 months.

Frequent Flyer Australia: Earning Points through Flying

Just make the effort to enter your frequent flyer numbers when booking flights. Combine efforts using “Family pooling.” Virgin allow families to transfer all points and status credits earned to a single family member. This is a huge bonus for families who don’t fly that often. Family pooling makes it far easier to gain status, and it benefits the whole family when you fly together.

Unfortunately, Qantas don’t offer family pooling.

The ideal points collector would be one that is flying regularly on work funded flights. Locum agencies, I find are happy to add your frequent flyer numbers to flights they book. You can even add your frequent flyer number at check in.

The further you fly, the more points you earn. If you fly overseas regularly, it is worth looking at the airlines that fly your route. Make sure you make use of the those points.

Frequent Flyer Australia & Credit cards

It easier to earn frequent flyer points through credit cards and shopping rewards than flights. Many credit cards offer lucrative sign-up bonuses (up to 150,000 velocity points currently).

Virgin and Qantas advertise credit card offers on their websites.

Obviously, this could be a dangerous game. Scott Pape (The barefoot investor) thinks airline points are a dangerous waste of time.

You don’t need a credit card to use frequent flyer points. If you are not completely on top of your finances, religiously paying off your card in full each month automatically, skip this section and focus on the other methods of points collections.

Those with plenty of surplus cash each month and good financial habits may want to consider using credit cards. Paying off the credit card in full is a non-negotiable requirement. Ironically, credit cards and loans are only a useful tool for those that don’t actually need to borrow money.

Earning Points through Credit Cards

There are two ways to earn points using credit cards. Through sign up bonuses and by points earned on transactions.

Sign up bonuses are often generous and tempting. Travel hackers who make a semi-career out of optimising points will sign up to credit cards for the bonus, meet the minimum spend and close the card. Cards lock you out of the sign up bonus (often for 18 months). These hackers work their way around the different credit card companies to utilise many sign up bonuses within a 18 month – 2 year cycle. Then start again.

This is a lot of hassle. There is a lot of small print. If you don’t follow all the terms and conditions you miss out on the bonus. Some of the credit cards put you through a lot of hassle to approve your card (for others, it seems automatic!). And it can definitely damage your credit score, although not necessarily if you are careful. It is probably the most lucrative way to earn points for those that don’t spend a lot of money on a regular basis.

The alternative is to sign up for a credit card that offers good long-term points rewards for spending. Ideally you want a sign-up bonus, but the focus is on the reward per dollar spent. If you are a high income, high spending household or business owner this may be more lucrative than serial credit card hopping (and a lot less hassle).

Does Travel hacking damage your credit?

It is not a good idea to sign up for a credit card if you are planning to apply for a mortgage in the next year. If you are considering opening a credit card, check your credit score and monitor if you are using credit cards to earn frequent flying points.

My credit score did dip after a credit card application. Over time this recovered and exceeded the original score. Monitoring your credit score gives you an idea of when you are pushing your luck with credit cards!

Frequent Flyer Australia Status

Status credits reward frequent flyers over those collecting points in other ways. Most airlines offer a tiered membership status. The higher up the membership status, the more perks available and points earned per flight.

Gold status gets you lounge access, bonus airline points each time you fly and priority boarding.

I think the appeal to most is the ability to get into the airport lounge. By making the lounge seem exclusive, those that are excluded feel they are missing out. Yes, there is free coffee, wine and snacks. But it is not worth paying extra to get these small benefits.

Both Qantas and Virgin make gold members feel important by allowing them to skip the queue with priority boarding. But realistically, does anyone really need to be on the plane for an extra 10 minutes?

The most practical benefit I have found with gold Velocity membership is priority baggage. Your bags coming out first due to the priority baggage label means you can exit the airport faster (yay!) and sometimes beat the queue to the taxi rank.

Here are the links for Qantas status benefits and Velocity. You need a lot more points to gain status with Qantas so will need to be a regular flyer. With velocity, not as many points are needed and you can family pool status points. This is within reach with a status offer, and a couple of family flights.

Both periodically offer discounted status where you can earn the membership tier with fewer flights. This may be worthwhile if you will be able to maintain your status afterwards.

The airlines offer status to improve brand loyalty. The danger is you find yourself booking more expensive flights to maintain status and enjoy the perks of status with your chosen airline.

Virgin vs Qantas

Most will need to focus on one airline or the other (although certainly collect both). Your ideal frequent flyer membership will depend on

  • Intended use of points (overseas flights with a partner airline, domestic family trips)
  • Usual flight routes and which airline flies these
  • Grocery shopping habits (ideally want aligned with your chosen airline)
  • Flying frequency (Qantas frequent flyers need to be regular flyers)
  • Whether you have a family (Virgin offer family pooling of points and status).

Partner Airlines

Both Qantas and Virgin partner with other airlines. This means you may earn points on these airlines, and redeem points for flights with these airlines. If there is a regular long haul airline you prefer to fly with, it is worth checking whether they partner with Virgin or Qantas. Long haul flights earn the most points and offer the most value for redeeming points (if you can earn enough).

Hassle Factor

Collecting frequent flyer points can become a full-time hobby if you want to get really involved!

But those who are looking to minimise hassle can also get good value with a small-time contribution.
For the low hassle version, sign up for Coles, Woolworths, Velocity and Qantas. Put the shopping apps on your phone and activate boosts and offers just prior to a shop.

When you are ready, sign up for the Point hacks introductory email course to learn about how to use your points.

Frequent Flyer Australia Devaluations

This is the biggest problem with frequent flyer points. Over time, the companies have been devaluing the points. This is likely to continue. That means you probably don’t want to be collecting points without using them for years at a time.

It’s important to set realistic targets, which may be an overseas flight redemption for a single or couple but is likely to have to be domestic for a family of four.

How to Use Points

The best points value is generally redeemed against international business flights, purchased with points. Business domestic flights also offer good value, but unless you are very tall seem of little benefit over economy to me. Economy international and domestic flights offer reasonable value, particularly over peak periods (school holidays) where the cash value of the flight increases.

Travel hacking for families

It is often hard for families to redeem seats together. For international flights that is a lot of points! Virgin Australia is a family-friendly option with family pooling of points and status. They allow pausing of your status whilst on maternity leave. Gold members are guaranteed four reward seats together to any domestic destination as long as you book six months in advance. Check out Velocity family benefits.

Reward seat availability

Not all seats can be booked with points. Airlines offer a limited number of reward seats only. This can make redeeming points challenging.

Flights will need to be booked well in advance (Almost a year for internationals) in order to have a chance of a reward seat being available. It is best to be flexible with which day you will fly to increase the chance of reward seat availability.

Preparing for Travel Again

Are you looking forward to domestic and international borders opening properly? Perhaps it’s time to get preparing now. Check those passports – many will be out of date. It’s probably best to beat the rush and update before everyone is preparing for their overseas flight.

Take the easy steps to collect points, and consider signing up for Point Hacks email course.

How many frequent flyer points do you have already? If you’re like most people, you probably don’t know the answer to that question. You may have points on credit cards, airline memberships and grocery shopping rewards than can be transferred and combined. Check your balances out!


My Experience with Frequent Flyer Australia Strategies

Over the past 5 years, I have been increasing my savings rate and focusing on building investment assets. But I still didn’t want to miss out on travel!

I had heard about frequent flyer points, but they seemed too good to be true.

Perhaps for the person being flown around by their employer, or a business owner charging hundreds of thousands of dollars to a credit card each year. I had also read the system wasn’t as generous in Australia as in the US.

Would collecting frequent flyer points be worthwhile for an Aussie cheapskate like me?

Hearing a couple of my colleagues had scored almost free flights to the US with points pushed me over the edge to check it out.

Learning the Game

At first, I didn’t know where to start. The answer, as usual, was google. I discovered Point hacks who offer a free email introductory course to talk you through the basics.

I decided Velocity points were the goal, to be converted to Krisflyer (Singapore air) and redeemed to pay for a trip to Europe. Our local supermarket is Coles, and their flybuys points can be transferred to Velocity.

I signed up for Qantas points and Woolworths Everyday rewards but have pretty much ignored them.

I signed up for a few credit cards over 18 months for the signup bonuses. Leading up to investment property purchases, I avoided credit card applications. I used Credit Savvy to monitor my credit score and took a long break after a credit application caused my score to drop by 50 points. It rebounded within 6 months.

I checked my bonus offers on flybuys before each shop, and found particularly leading up to Christmas some great offers.

Gaining Status

A status offer came up for Virgin. A few trips for locum work easily made me eligible. With family pooling and a few flights for work and fun, I maintained my status.

Redeeming Points on International Flights

18 months into collecting points, I redeemed them all with Singapore air for two return economy flights to Europe. We are a family of four, and it was clear I couldn’t collect points for all 4 of us fast enough. So it halved the price of our flights. Alternatively, I could have used the points for 1 return business flight to Europe. Unfortunately, I didn’t feel I could pull that off and keep the rest of my family in economy!

Now seems a pretty good time to optimise points balances in anticipation of travel becoming a lot easier. Have you tried travel hacking? Post about your frequent flyer Australia experience

Aussie Doc Freedom is not a financial adviser and does not offer any advice.  Information on this website is purely a description of my experiences and learning.  Please check with your independent financial adviser or accountant before making any changes.

About to Graduate from Medical School? Seven Steps to Start on your Journey to Financial Freedom

So, you’re about to graduate from medical school, congratulations!  What an amazing achievement.  You will always look back at this time with pride and an incredible sense of achievement.

You may be dreaming of transitioning from the world of study and awkward loitering around the ward, to the world of a “proper” job, a sense of responsibility, your own patients and finally a regular pay cheque.

Beyond the amazing opportunity to make a positive impact on your future patients, your colleagues and the future of medicine, you have incredible financial opportunities too.

Medicine is well compensated.  You will likely earn above average income within a few years and could fairly easily achieve financial freedom to do what you want, travel and make the world a better place with donations or charitable work.

It is easy to assume these privileges will be yours no matter what you do with your modest first pay cheques.

But the small choices you make with your money add up to define your financial future.  You cannot, even on a doctor’s wage, have everything you want without planning for it.   Many of your colleagues don’t understand this until they are nearing their desired retirement date.

Those of you with good financial intentions may have noticed financial planners sponsoring medical school events, graduation balls or sending you invitations to join their privileged group.

Doctors are usually time poor, and known for their ineptitude with money.  We also tend to be a little too trusting, assuming other professions follow a similar ethical code to our own.

Be aware that these companies are interested in you because of your potential to pay them lots of money over the next forty years.

Be very careful who you get advice from – you should contact them (not the other way around) and pay for advice up front, rather than let them earn through commission or management fees, which is likely to cost you multiples more in the long-term.

An average adult’s full-time earnings were $82,752 in 2018.  The average full-time intern earned around $70,000 in 2019, and earnings increase quickly over the first ten years.  But many specialists end up with no idea where their high income goes, and lack the freedom and choice they desire in life.

Here is a step-by-step guide to getting your finances organised for a bright future. 

  1. Work Out Where Your Stand at the Start:

    a. Student Loans

I want you to log in to your student loan accounts and work out how much you owe.

Many people bury their heads in the sand (OK, I did this) and try and avoid acknowledging how much debt they are in.

You are going to have to pay these off one day.

You need to work out how much you owe, how much interest you will be charged, and how much of your intern wage is going to go towards paying these off.

Whether to pay off your student loans aggressively is something to be considered carefully.  Often, it is more beneficial to invest that extra money for a potentially greater return.  But knowing how much you owe (and your net worth) will help you get a realistic grip of the situation.  And this may stop you getting overexcited and splashing the cash about like a drunken gambler during your first year of work.

b. Bad debts

You may have built up some of these towards the end of medical school (ahem, OK, again I’m guilty!).

Credit and store cards are likely to be charging you a should-be-illegal interest rates of 20-30% so are going to be a top priority to pay off as soon as possible.

Pay off any debt with interest over 5% before investing.

c. Necessary Debts

Perhaps your already committed to a mortgage.

Now is a good time to review things.  How much do you owe?  Do you have any equity?

Was the property a good investment and will likely grow more equity over the years, off which you can leverage for further investments?

Are you being charged a competitive interest rate?  Do you have offset accounts set up that your pay can go in to, and your savings stored in, in order to minimise interest paid?

The concept of good debt vs bad vs tolerable debt is really important.  Read more about it here.  No matter the debt, make sure you always make the necessary repayments (automate everything possible) to build a credit score.  

d. Investment Debts

Maybe you’re well ahead of the pack and have already got investment loans.

Or perhaps you’ve made some ill-advised choices over the years.

Time to face up to the situation, whatever it is.

Similar to your principal place of residence, is this a good investment, can you manage the debt, what interest rate are you paying?

e. Your Expected Living Expenses

Hopefully these will be fairly low.  Sit and work it all out.  The amount to which you can control your regular living expenses will determine how much you are able to pay down debt, save and invest.

f. Work out your “Gap”

The gap between your income and expenses is going to define your future wealth. Even if its only a tiny amount at the moment, as long as it’s a surplus you’re on the right track.

The aim is to start with a small POSITIVE ‘Gap” and increase this every time you get a pay rise.

You can use this “Gap” to save up your emergency fund, pay down extra debt and then roll them into investing for the long-term.

2. Emergency Fund

Work out how much emergency fund you need, and work out how to save it up.  What sort of emergencies can you see cropping up?

Car blowing up?  Needing to fly interstate in case of a family emergency?

What if you’re sick and unable to work before building up sick leave allowance?

Most financial experts recommend 3-6 months expenses saved; this will take a while!

Start with a more achievable $1000-2000 depending on what emergencies seem possible to you.

Work out how quick you’re able to save this by setting some money aside each pay.

  1. Insurance needs

Consider whether you need income protection, life insurance or total permanent disability insurance at this stage.   You will obviously need to have chosen the best indemnity insurance.

Do you have dependents? What would happen if you couldn’t work, or were permanently disabled?

Check what insurance is automatically included in your super, and whether this is appropriate for you and your stage of life.

Don’t cancel insurance unless you have carefully considered the long-term consequences.  In 10 years time, you may have developed comorbidities preventing you from getting cover.

  1. Long-term plans

This is really tricky!  If you already have a ten, twenty or forty year plan – write it down, work out what your relevant financial goals are and then work out how you are going to reach them over the prescribed time period.

If you have no idea, it is safe to assume you will want to do something with your life in the next twenty + years that is going to cost money!

You may want to buy a house, take time off to travel or work for free, pay off student loans or take time off to have children (and many doctors don’t end up qualifying for any paid parental leave).

Once you have paid off any high interest debts and got an emergency fund, the extra money freed up can be immediately redirected (by direct debit) to savings before it disappears.

Options initially include savings accounts, share investment (including micro-investing), superannuation (including first home savers scheme).

It may seem the amount you can put aside is too small to be worthwhile.

It’s not, and you have to start, and will be surprised after a couple of years by the significant amount you’ve built up if you stick with it.

5. Superannuation

Surely I’m too young to think about this I can hear you moan!

I hate to break the bad news to you, but your years behind in starting to contribute given all those years in higher education.

At bare minimum, make sure you tick the box that means you contribute enough to get the maximum amount paid into your super account from your employer.

After your debts are paid off consider why you would make voluntary contributions.

Check out more super for interns here.

6. Buy your first car – or better, don’t

Consider whether you really need a car straight away, and what you should buy.  Car’s are a big factor in your future financial success.  Cars depreciate in value from the moment you purchase, the exact opposite to buying assets that increase in value to build wealth.  A flash car early in your career is going to make a big dent in your financial future (far more than the cost of the car due to compounding).

7. Buy and read “The Barefoot Investor” by Scott Pape.

For a few, his advice is insultingly obvious.  For most, its life changing.

Definitely the book your likely to be recommended by a doctor if asked for financial advice.

Worth buying a paper or kindle copy to refer back to over the years as your circumstances change.

It will have you organising your money and building investments automatically -which really is the secret!

If you’re feeling overwhelmed by so many goals competing for your savings, read about how to get over money challenges.

I wish you all the best in your first year of practice.

I hope your patients are the right balance of interesting and challenging.

I hope you’re well supported by your superiors and peers.

Your learning curve will be sharp.

I hope you make the most of all the wonderful opportunities you encounter.

Good luck!


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