Don't be sucked in by tempting rewards schemes when you're shopping for a credit card, says Consumer New Zealand.
Its advice came as competition ramps up among credit card companies in the battle to sign up Kiwi customers.
Airpoints, cashback payments and shopping rewards are among the offerings from card providers.
But consumers have been warned to think twice before signing up for plastic solely on the basis of loyalty programmes, which in some cases require a spend of $30,000 to get $200 of rewards.
Consumer NZ chief executive Sue Chetwin says the hundreds of thousands of New Zealanders who have credit cards would be better off paying off card debt than transferring providers on the basis of earning points for big spending.
"If you don't pay off the full amount every month, you should be wary about going for all the whizz-bang extras you can get," Chetwin said. "You should go for a low-interest, low-fee credit card rather than any of the cashback or rewards schemes."
Cards with paybacks cost as much as $150 a year at major banks, compared with $30 or less for cards without a scheme. The charge is on top of the interest rate charged on outstanding balances, usually 20-22per cent.
A Consumer NZ survey found New Zealanders spent an average $12,000 a year on credit cards.
For people spending that amount, a third of the cards offering travel and cashback incentives would not earn them more than they spent in fees, and 40 per cent of cards offered shopping rewards.
The Amex Air NZ Platinum was the worst deal for those customers, costing $471 more to own than it would deliver.
Ratings and research firm Canstar had also recently compared the rewards schemes offered by 21 of the most popular credit cards.
Research director Mitchell Watson said it was hard for consumers who were not big spenders to make such schemes pay off.
On a $12,000 spend, just over half the cards Canstar surveyed would cost more in fees than they offered in rewards.
Canstar's best rating went to ANZ's Cashback Visa and MasterCard. Consumers can earn back 0.5 per cent of their annual spend if they put up to $10,000 a year on their card, or 1 per cent if they rack up purchases up to $30,000.
But they are a better deal if you are a bigger spender.
Canstar found that for someone spending $24,000 a year on their cards, only the American Express Platinum Charge Card's rewards programme would not deliver enough rewards to make the annual fee worthwhile. It costs $1250 a year.
Canstar says the average reward return for a consumer spending $24,000 this year is $121.20 a year, up from $116.20 last year.
One of the biggest moves in the rewards scheme market occurred last month when Air New Zealand said it would no longer offer airpoints to BNZ credit card customers and signed with Westpac.
Shoppers will earn one airpoint per $120 spent on a Westpac Airpoints MasterCard.
The card costs $55 a year, $10 more than the bank's standard Hotpoints card, and customers will have to put $24,000 on it to earn enough points for a $200 airfare.
But they are getting a better deal than with BNZ; they had to spend $30,000 to get the same $200 of airpoints with a GlobalPlus MasterCard, which also cost $55.
BNZ is introducing a new cashback offer where customers get $1 back for every $150 they spend on a standard card - or $200 for every $30,000.
It will continue to offer Fly Buys on its home loan products and offer cashback rewards to GlobalPlus home loan customers, too.
An apparent plus may be a minus
Elisha-Jane Williams and her husband, Aaron, signed up for a credit card based on its rewards scheme.
But in the past 2 years, the Palmerston North pair have accrued only 20,000 points on their Westpac hotpoints MasterCard - enough to buy $250 of goods.
The most the couple spent on their card each month was $1,000. Some months they don't buy anything with it.
Consumer New Zealand estimates that Williams' card leaves her $21 out of pocket over two years if she spends $6,000 a year on it.
Williams said she was surprised.
"It's probably pointless us having one."
Her most recent rewards purchase was a stick blender.