"If thats not saving interest and using the banks money to my...

"If thats not saving interest and using the banks money to my advantage then im not sure what is."

That's for sure.

You save .3% per month from your mortgage offset (assuming 7% interest rate and allowing for transaction spread over the month => 7/12/2=.3%) and pay 1.5% in transaction costs i.e. it costs you 1.2% of your credit card turnover.

On $10K turnover per month you are losing $120 per month or $1440 per annum.