Blog entries tagged with "money"

Rewards points are worth something

Monday, October 16th, 2023 at 08:27pm

I have been thinking about changing some things around in regard to my credit card so I decided that I should look up what the options are with my current card. It has been a while since I compared the value between types of points or the difference between how the points are redeemed, so I was pleasantly surprised to find that I might already be on the best option for my use case.

I learned that with my current main credit card there are three ways to get cash value for the points:

  1. Cashback to the card
  2. Purchase gift cards to use for regular shopping
  3. Transfer to another loyalty program, then in that program use the points in some way

Before I checked the numbers I would have assumed that cashback to the card should have been the best. There are no third parties involved so the costs should be minimized, however (spoiler alert) that is not the case.

The rate at which points are awarded is between 1 and 3 points per $1 depending on the type of transaction and/or who the transaction is with (eg some large retailers), but for comparison purposes I am going to use the rate of 1 point per $1. So $1000 will result in 1000 points.

  • 12,500 points gives a $50 cashback directly to the card
  • 10,210 points can be redeemed for a $50 Coles/Woolworths gift card
  • 10,000 points can be converted into $50 Flybuys dollars

My card is currently covered by the $8/month fee for my home loan, that is $96/year or essentially the same as the $95 annual fee for existing customers. I will also round it up to $100 to keep the calculations simpler.

So what is the minimum spend to cover the annual fee?

  • $25,000/year or $2083/month if getting cashback to the card
  • $20,420/year or $1701/month if getting gift cards
  • $20,000/year or $1666/month if getting flybuys dollars

The cashback option might be the most convenient to the consumer as there is zero involvement once it is set up (there is no actions needed to get gift cards and then remember to use them), but it is also the least cost for the bank to offer.

But what other benefits does the bank get from the other options? Converting the points to Flybuys is best for me, but does this mean the bank then has access to all the data Flybuys has collected about my purchase history? Does Flybuys also get information about my credit card activity?

Is the $5000/year difference between cashback and Flybuys dollars the value of my data?

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Taking a shortcut

Monday, October 5th, 2020 at 09:34pm

It is now October which means for Australians that their tax return is due by the end of the month. I always do mine as early as possible so I can get my tax refund as early as possible, but I have noticed a couple of articles popping up and also while cleaning up my desk I found some notes with my calculations.

With so many more people working from home, the ATO introduced a new “shortcut method” for claiming home office expenses, this is in addition to the existing “fixed rate” and “actual cost” methods.

As I was one of those working from home I sat down and worked through all three methods (not fully but enough) to determine which was the best for me to use.

Shortcut method

By definition this is the easiest to work out, you claim 80 cents for each hour you worked from home, this is all you can claim as it covers electricity, heating, internet, depreciation, etc.

As I knew I would be claiming something I had been keeping a record of when I had been working, so I counted them up and got 73 days. As I had always put in eight hours of work (making up time on a couple of days such as when my power was out) this meant I could claim:

73 days * 8 hours * $0.80 = $467.20

Fixed rate method

Under this method you need to have a home office, but if you do you can claim 52 cents for each hour (which covers electricicty, heating and decline in value of office furniture) and then the work related use of phone, internet, consumables/stationery and decline in value of the equipment.

The first part is simple:

73 days * 8 hours * $0.52 = $303.68

Phone and consumables are also easy as I don’t use my phone for work and I have used about ten pages of a cheap notebook, so no cost incurred there.

My laptop is provided by work so there is no cost I have incurred for that. I am using my existing monitors, keyboard, mouse, etc but they are all a couple of years old and it wasn’t clear if they were already part of the fixed rate or should be calculated on their own, I decided to leave them out.

The remaining item to calculate is internet. I live alone so 100% of it is used by me, but how much of that is work related? I pay $80 per month for an unlimited plan, so there are is no clear time based or usage based way to split between work and non-work. The best answer I could find is to pick a method that you can justify.

First let’s see about time based: there are 168 hours in a week, if I worked every day then that is 40 hours. So 24% of my internet use is work related. I pay $80 per month and there were three and a half months of working from home:

3.5 months * $80 * 24% = $67.20

What about usage based? I keep track of some stats for a few days and found that the data used from my work laptop ranged from a low of 300MB one day to a high of 2GB on another day that had a few Zoom meetings. That was lower than I expected, and also nothing compared to what I use for non-work, as a percentage it would be in the single digits, so I didn’t continue down this path as time based is higher.

So where does this method leave me?

$303.68 + $67.20 = $370.88

I can claim more under the shortcut method than the fixed rate method.

Actual cost method

The final method is where you work out all the individual costs, but what are they?

In my study the modem, router and two computers are on 24/7, so there is no additional cost for them to also be on when I am working.

However there are work related things that do consume electricity:

  • my monitors, speakers and desk lamp would normally be turned off, using a power meter I found that collectively they consume 0.075kWh
  • averaged over a few hours, I measured my work laptop at 0.013kWh
  • the ceiling light is an LED that comes in at 0.007kWh

Combining these together and multiplying by the cost of electricty at the time:

( 0.075kWh + 0.013kWh + 0.007kWh ) * $0.262 = $0.025/h

Hmmm… claiming 2.5 cents per hour is a lot less than claiming 80 or 52 cents per hour.

The other thing that is now on when I am working from home is my central heating. This is gas, so I will first work out how much electricity it uses. As this is controlled through Home Assistant I can see when it is turning on or off, and I am also pulling instantaneous usage from my smart meter.

I could probably do a deep analysis to get real values, but instead I looked at a couple of cold days and found that the heating is on for ten minutes of every hour, and when it is on the power usage jumps by about 400W for those ten minutes:

( 10 minutes / 60 minutes ) * 0.4kW * $0.262 = $0.017/h

This means my total cost of electricity to work from home was:

( $0.025/h + $0.017/h ) * 73 days * 8 hours = $24.52

The only thing I have that uses gas is my central heating, so I don’t need to worry about splitting the type of usage (eg heating vs cooking vs hot water), I just need to come up with a work and non-work ratio.

I don’t have the heating on 24/7, but the months that I was working from home were all cool to cold, so the heating was on for most of the time that I had it scheduled. If I said that during the day on a weekday was work, with weekday evening and weekends being non-work, my estimate was 40% of the schedule was work.

The cost of gas varies throughout the year, based on my bills I estimated the cost for the period I was working from home to be:

$420 * 40% = $168

From what I worked out for the fixed rate method I have internet expenses to include, but I have no expenses for consumables or any legitimate decline in value for furniture or equipment. I also have no specific cleaning expenses for my study, so not including anything for that.

After all this, where am I up to?

$24.52 + $168.00 + $67.20 = $259.72


Putting the different methods side by side:

  • Shortcut: $467.20
  • Fixed rate: $303.68
  • Actual cost: $259.72

If I had needed to buy a computer for work or new furniture the situation might have been different, but the shortcut method works best for me so that is what I went with.

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The value of rewards points

Friday, March 21st, 2014 at 12:23pm

A few years ago I tried to work out the value of different rewards schemes in order to do some comparisons, this went into a post that I never completed. There was a segment in last night’s episode of The Checkout so I decided to dust it off, double check the numbers and then post it:

I currently get both Flybuys and Qantas points. As part of two separate discussions I started to wonder how to compare the relative value of the points and whether I should get one instead of the other.

You can redeem both points for a variety of things, from actual flights (that I rarely take) to appliances to gift vouchers. I opted to use vouchers (dollar value and movie tickets) for comparison, you can buy the same movie ticket vouchers in a book of 10 for $125.


  • $100 gift card for 20,000 points – 200 points per $1
  • 10 adult movie tickets for 22,200 – 2,220 points per ticket, 177 points per $1


  • $100 gift card for 15,100 – 151 points per $1
  • 6 adult movie tickets for 14,500 – 2,416 points per ticket, 193 points per $1

For a gift card Qantas is slightly better and for movie tickets Flybuys is slightly better, but I would say that they are pretty much the same.

What do you need to spend to get something out of the points?

One credit card has an annual fee of $89, at a rate of one Qantas point per $1 you need to put at least $1,100 on the card each month just to cover the fee.

Another credit card has an annual fee of $395, at a rate of 1.5 Qantas points per $1 if you use the American Express card or 0.625 Qantas points if you use the Mastercard. If you somehow managed to put everything through on the American Express card then you can cover the fee by spending almost $5,000 per month. But many places do not take American Express so there is wasted time asking or trying the card and having it fail…

I do have a credit card that gives me points, but it is part of my home loan package so it doesn’t have its own fee. I try to put everything (automatic bill debits are very convenient) through the card which is then automatically paid off from my offset account. This is done to minimize the interest I pay on the home loan, but it is a nice coincidence that the points I get balance out in value to the $10 monthly fee for the home loan.

(To actually get that value from the points you need to redeem them, in my case that is with the movie tickets, which we were already buying in books of 10.)

One of the concluding points in the segment on The Checkout is that you should not change your behaviour just to get extra points. If my home loan package didn’t include the credit card then I would have remained with my previous card that had no points, but also had no fee. I also turned off all the notifications of special offers where you have to activate it and then buy a certain item, they are not worth my time thinking about.

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