If you’re like most people, you probably have a wallet full of colourful plastic cards that are taking up space and making it harder and harder for you to close the clasp!
If you look through them, you’ll likely discover that while some of these cards are useful credit and debit cards than a few are loyalty cards you just never use.
It’s understandable how anyone can end up with such a collection. Practically every retailer offers a loyalty point scheme. At the time, it can be hard to think of a good reason to refuse and with a little effort, the points we collect with plastic can be worth it … as the following tips show.
Before saying yes to every loyalty point card which is put under your nose, think about how often you shop in a particular store. Is it really worth the effort of filling out the application form?
Think about where you would shop regularly even if you weren’t part of a loyalty scheme. Once you’ve identified these stores then take advantage of the schemes that they offer.
On the other hand, if you only shop somewhere once in a while then do yourself a favour and refuse a card. Owning it may make you more inclined to shop there, increasing your overall spend.
Pick credit cards carefully
Loyalty cards aren’t the only ones which offer points schemes. Many credit cards reward customers with attractive points which can be redeemed for a range of goods and services.
For Canadians, this is a huge attraction when selecting a credit card. According to a survey by American Express Canada, 89% of Canadians carry at least one credit card in their wallet with more than half (52%) carrying more than one. Of those who own credit cards, 68% claim rewards programs are important.
An Amex Credit Card is an example of a card which pays customers in points for spending. Again, take advantage of this type of scheme for planned or routine purchases like a new set of furniture or Christmas shopping.
It also makes sense to use a credit card for travel-related purchases such as flights and hotels. The accrued points can be used for future vacation expenses.
A word of warning – when you know that every time you spend you are ‘earning’ money, there is the danger of developing a habit of spending more than you normally would.
In order to make a points system on a credit card or retail loyalty card really work for you, stick to what you buy routinely. Once you’ve gathered a useable number of points, decided carefully how to spend it so your efforts are not wasted.
Track your history
The best tips concerning card management involve looking at your past behaviour to identify patterns and understand your habits. By tracking your history you can not only establish what sort of cards attract the most of your attention but also how much they’re saving – or costing – you overall.
To track your history you need to record each use of your card and how much it saves or what reward it offers. Compare this against the amount you spent at the time and work how much better off you are through your use of cards. If you find you don’t use them enough to warrant having them then clear some space in your wallet or purse by getting rid.
Understand all the rules
Loyalty cards generally fall into specific categories, offering set rewards for continued spending over a long period time. However, not all loyalty systems operate in exactly the same way so it’s important you understand all the rules for the different cards in your possession.
This means looking into when you can use them and what rewards you may be eligible to claim. Check to see whether the provider of your loyalty card is associated with any other brands or companies as sometimes you may be able to get rewards or benefits from these places too.
To make the most of your must first understand them so ensure you read all of the terms and conditions in full before making any agreements. This is a tip which you should apply to all other types of card – including your credit card.
Earn cash back
Generally applied to credit cards, cash back is an option which many loyal spenders forget to take advantage of and is therefore something you should look out for. Cash back essentially offers you a small return on your purchases. This may be for a set amount but is more typically represented as a small percentage of the amount you spend.
Depending on the type of card you have, cash back may be available on all purchases you make or only at items which you buy from specific retailers. The important thing here is to know where you get cash back and make the most of it. Don’t go out of your way to buy items in the appropriate places but if you’re shopping there anyway then consider using your card to benefit from the reward.
If you have enough money to pay for these items via other means (such as a debit card or even cash) then you can always use this to pay off your credit card balance straight away so that you aren’t left to deal with the bill later on down the line.
Know when to use cards and when not to
The most important financial lesson to learn when dealing with cards is to know when to use and when not to use them. At present, a campaign is running in Canada to encourage shoppers to leave the plastic at home one day a week with the Canadian Federation of Independent Businesses calling for ‘Credit Free Fridays’.
The main reason behind this is the preservation of businesses (as credit card purchases force retailers to hand over a share of the purchase price to credit card companies) but there are some interesting points to take on board from this incentive.
The main idea is that not every situation is the right time to use a card – whether it be a debit card linked to a bank account, a credit card or even a loyalty card. To ensure that your finances are not adversely affected you need to understand when to use these cards and when to leave them be. Once you’ve mastered this you’ll find it much easier to stay on top of your finances and reap the rewards due to you.
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