“Few people think the secret to their happiness comes from prudence and caution. Most people think it comes from that stroke of genius which will put them on easy street.” – Howard Marks
If you have an active bank account and you’re not signed up for your banks rewards program to get points, you are doing this life thing all wrong bro! People find reward programs offered by banks to be rather worthless to say the least (I disagree with this btw). Reward programs can be extremely opaque and hard to understand, no arguments there.
However, I’m here to convince you that rewards programs are pretty cool and worth it and you should give it a go, especially since you’re subsidising those who use the same bank as you if you ignore them anyways.
What are reward programs? In short, your bank wants to give you some money back (reward you) for every time you swipe your bank card to pay for something, whether it is groceries, fuel etc. They do this using some sort of point system or a form of virtual currency e.g. FNB gives you eBucks, Nedbank its greenbacks, Standard Bank its UCount and finally apparently ABSA gives you cash back. It is similar to Rewards programs that are being offered by your Pick n Pay’s(Smart shopper), Clicks(club card) and Woolies (WRewards), just to name a few.
Why should you bother with these reward programs? Simple, you get money (rewarded) for spending money using your bank card! And you can spend this money however you wish! AWESOMENESS. The cool thing about it is that you get discounts that you wouldn’t have got if you weren’t earning your rewards points or you can invest these rewards with your bank. E.g. depending on your rewards level with eBucks certain “stores” offer up to 40% off on their goods/services. This month, KFC, Cycle Lab, Dischem, Shoprite/Checkers are on that list of 40% off. This means you can buy a R100 gift voucher for R60, and oh boy don’t we love a good bargain?!
Remember, the more you use your card, the more points you will collect.
The idea with these rewards programs is that you accumulate the maximum points possible for your spending range in that particular month, kinda like “sweating” your spending to get the most from it. Work it! Accumulate these points and use them for big ticket items or buy vouchers that you can use during the festive season. I am currently collecting KFC vouchers for my girlfriend who is currently doing her LLM in Duke University School of Law, Durham, North Carolina. These points are very helpful during gifting seasons, for birthdays etc. I mean you can buy gift vouchers up to 40% off on some instances, it’s a no brainer!
Most of these programs award more points if you do most your monthly spending on your credit card. I know a lot of people have control issues (instant gratification) when it comes to credit cards, well its easy just put a monthly limit on your credit card according to your monthly budget and you won’t overspend a cent because it is not possible and ensure that you choose the full payment method where you settle your credit card in full every month before it starts incurring any interest.
Rewards points offerings from your bank can be used to maximise on your spending and improve your financial situation. If managed properly. However, reward points systems differ from institution to institution. Which is something that one has to consider when choosing a bank and subsequently a rewards system that suits their own financial needs and goals. With that said, I suggest calling your banker to find out more.
More to come on the different reward programs.