Airline Credit Card Kickbacks

The short approximate story is that if you're spending less than R30,000 per month on your credit card, then the Kulula credit card offers the best net kickback rates, from R30,000 to R50,000 a month and the Nedbank American Express card the most (you can buy Mango flight Vouchers with it), and above R50,000 then using the DiscoveryCard Fast Miles (Silver) to discount Kulula flights offers the highest kickback rate.

Net kickback rates on credit cards

The net of card fees kickback rates are shown for each card (initiation fees are spread out over 2 years). Note that there's a bunch of assumptions underlying these calculations, including regarding spending patterns and that miles are used for a typical Johannesburg to Cape Town flight, and what the fares on that flight might be that are being saved. It's entirely possible that different results are obtained if there's targetted spending patters (e.g. to spending at shops with higher bounty points) and bounty points are only used where there's maximum saving (e.g. restricting use to business class upgrades).

	R10,000 monthly spend	R30,000 monthly spend	R50,000 monthly spend
Kulula Credit Card	2.2%	1.1%	0.6%
Nedbank American Express	0.9%	1.1%	1.1%
DiscoveryCard Miles (Silver)	0.2%	0.6%	0.7%
Avios Credit Card	0.1%	0.4%	0.4%
Diners Club SAA	0.0%	0.5%	0.6%
Diners Club BA	-0.1%	0.4%	0.5%
FNB Credit Card (Classic)	-0.4%	-0.1%	0.0%
DiscoveryCard Fast Miles (Silver)	-0.9%	0.8%	1.2%

Background

The first analysis was between the Nedbank cards (you can convert their Greenbacks into Mango vouchers) and the Kulula credit card (ie earning discounts on South Africa's 2 low cost carriers):

• You earn Kulula moolah with your Kulula credit card, which earns at a rate of 3% for the first R5000, 2% for the next R5000, 1% for the next R10,000 and 0% thereafter. 1 Kulula Moolah = R1.

• You can purchase Mango vouchers with Nedbank cards. Every R5 spent with a Nedbank American Express card earns 2 Greenbacks. A R100 Mango voucher costs 3500GBs, and requires a spend of R8750.

Then Thabo Hermanus suggested having a look at cards earning British Airways Avios (frequent flyer points):

• There is a Diners Club option, through which you earn 1 Avios for every R8.50 spend. However, you get more bang for your buck by linking your Diners Club card to the SAA Voyager program.

• There is also a Standard Bank Credit Card, but the ability to earn British Airways Avios expires on the 31st January 2014 (thanks to @MsciGumede & @Me_I7 for pointing this out on Twitter, and suggesting looking at the Avios credit card).

• On the Avios credit card you earn Avios which you can use to discount a British Airways flight. You earn 1 Avios for every R10 spent, and need 7500 Avios to book a 1-way flight from Johannesburg to Cape Town - this only pays for the airfare excluding taxes, cash charges & carrier fees. A spot check indicated that of a 1-way JNB-CPT fare of R1398, R1008 was carrier charges, taxes & fees - so the 7500 Avios saved R390. You need to spend R75,000 to get the 7500 Avios which saves R390.

Thabo also suggested looking at FNB credit card & eBucks:

• There are various rates of earning eBucks on the FNB credit card, but for most shopping you'll get eBucks to the value of 1% of your shopping. 10 eBucks = R1.

Ania Domagala suggested having a look at Discovery miles on the Discovery Card, as well as the savings on various levels of Discovery Vitality statuses.

• Qualifying spend on a DiscoveryCard earns Discovery Miles. Generally, you earn a Discovery Mile for each R12 spend (up to a maximum of R100,000 in a store), or you can pay a higher annual fee and earn a Fast Mile for each R6 spent (up to a maximum spend of R100,000 per month, thereafter a mile per R12 spend with the max. of R100,000 per store applying). See Discovery Card fees. Each Discovery Mile can be used to:

  • discount 10c of a Kulula flight booking (for anybody on your Vitality policy).

  • converted to South African Airways Voyager miles (at 1.5 Discovery Miles to each South African Airways Voyager Mile). Given that each SAA Voyage mile is worth some 6.6c, this means each Discovery Mile is worth 4.4c.

  • converted to British Airways Avios (1 for 1).

Thanks guys, for all the inspiration, info & suggestions.

Author Rob Baker

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