6 things you should know before jumping on the reward bandwagon

Posted on Monday, February 12, 2018 - 17:26

Are reward programmes worth your attention? Almost three quarters of Australian consumers have one, but maybe you are still trying to make up your mind. If researched properly in terms of how to use one and the terms that come with it, it can save you big time. However, if you are simply spending just for the sake of the rewards you could end up losing more money than saving it. Here are six things you should be aware of before jumping on the rewards bandwagon.

What does your plastic say about you?

If you are a what is known as a Transactor then Rewards will be more suited to your type of shopping. A Transactor is basically someone who uses their credit card for every day spending, and manage to pay the amount that is due in repayments in full every month. Even though you are a high spender you should be aware of taking on a rewards card as it comes with higher annual fees. This means that you will have to spend high enough to reap the benefits of your rewards that cover the fee of your rewards card.

Reward schemes can change without notice

Staying updated in with the terms and conditions of a reward scheme can save you the heart ache of all the money you spent trying to increase your reward points. Some reward cards like the Coles reward card will only give you points on selected products from associate stores. It will be in your interest to find out which products these are, before purchasing items that won’t add to your point scheme which you were planning to use to get a free flight. Check to see if the points have been reduced, but the costs are still kept the same. If that’s the case, you can always shop for a new rewards scheme that benefits you.

Know how to maximise your rewards

It’s all about the shift in tactic where you let your rewards work for you instead of the other way around. The principles are simple; the more you spend on your rewards credit card, the more rewards you get. This ties in with our second point in that you should be aware of what can gain you points in the system to help you plan your spending strategically. If you’re doing grocery shopping or tallying up your vehicle and travel expenses, you can use your credit card to pay these off.

Another smart way to get those points flying in your direction is to do group payments on your credit card. If you have gone out for a dinner date you can whip out your credit card and ask everyone else to pay you with cash later. There are plenty of other savvy ways you can use your credit card that will help you gain points.

Check to see if the features match your lifestyle

Before you sign up for a rewards card there will be a few questions you will have to ask yourself. For example, if you are not that much of a frequent spender and hardly use your credit card for big purchases is having a rewards card worthwhile? Are the fees that come with it worth it, and will you be able to maintain it? Are there any extra purchases that you will have to make to scrape in minimum rewards? Is there a time limit in which you will have to use these rewards?

What are your reasons for needing one?

It’s all good and well when you are drawn in by the endless possibilities of saving, and gaining frequent flyer points to finally go to that destination you have been dreaming of. However, you will have to revaluate once more whether getting a card is worth it in the long term of things. If you are getting one because of FOMO (Fear of Missing Out), then it’s advisable that you steer clear from it.

If used right it can do a world of good

Reward programmes are not con programmes that seek to rob you of your hard-earned money by gaining points that you will never use. If you follow our tips and guides that come with maximising your reward programme, it can help you save in a big way on food and travel. When shopping for a credit card that offers rewards always compare its interest rates and the value it will add to your financial life. Never settle as there are plenty of offers that will help you when it comes to keeping your budget and saving.

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Filed Under: Credit Cards