Is there a best credit card?

Is there a best credit card?

Black is the new gold – at least that’s what Woolworths want us to believe…

Been thinking about credit cards quite a bit recently and wondering if there is a “best” option. So I have been looking at some of the offerings and the first one I am writing about is the “new” Woolworths Black credit card.

On the face of it, it seems quite appealing. Assuming you earn enough to qualify for the card (I think it is >R500k pa) then they are offering a whole host of very attractive things to go with the card. These include:

  • 3% back (in vouchers) on everything you spend at Woolworths.
  • 1% on everything you spend anywhere else
  • A “free” coffee at a Woolworth café twice a month (not sure if this is coffee or a cappuccino)
  • “Free” deliveries if you shop online
  • And a “free” copy of Taste magazine (Woolworths’ food magazine) and finally,
  • Automatic VIP membership to Woolworths rewards (for 1 year).

Sounds great, where do I sign and what’s the card fee?

The annual card fee is R595…ouch!

So I did a bit of investigating and thinking…what is the value of the “free” benefits and what would I need to spend to cover the card fee?

  • I would need to spend R20000 at Woolworths to get R600 back in vouchers.
  • I would need to spend R60000 outside of Woolworths to get R600 back in vouchers.
  • The value of the “free” coffees -±R30pm – that’s R360 per year
  • The value of “Taste” Magazine -±R30pm – that’s another R360 per year
  • So I guess the value of the “free” stuff “covers” the cost of the card but let’s look a bit more closely at what you actually get back.

If we assume we spend R5000 per month on the credit card and that we spend 20% (R1000) of this at Woolworths (and pay it off in full each time) I would get an annual benefit of R965 after the cost of the card. In other words if I spent R60000 on the card with 20% of this at Woolworths, I would get a benefit of about R965 (or 1.6% of the spend). Forgive me for being sceptical, but that’s not a great benefit. And if my maths is correct, it appears to decrease if you spend more. How does that work?

A closer look at the table sets out the actual annual fees and “savings”.

W/W Spend (20%) Voucher Rewards Other Spend Voucher Rewards Other rewards Total rewards Annual rewards After fee Annual spend % back (net fee)
R 5k R 1 000 R 30 R 4k R 40 R 60 R 130 R 1 560 R 965 R 60k 1.61%
R 10k R 2 000 R 60 R 8k R 80 R 60 R 200 R 2 400 R 1 805 R 120k 1.50%
R 15k R 3 000 R 90 R 12k R 120 R 60 R 270 R 3 240 R 2 645 R 180k 1.47%


1.       Voucher rewards on spend at W/W = 3%.

2.       Rewards on “other” spend = 1%

3.       “Other” rewards = 2*monthly coffee + Taste Magazine

So while Woolworths might want you to believe that “Black” is the new gold it certainly looks like that it is almost as expensive as gold and certainly not nearly as attractive as it first appears. On the plus side, additional cards for family members are “free” but I am sure there are far “better” options than this one.