Friday, July 3, 2009 7:17 AM
Use loyalty cards to stretch your household budget
Chaya Cooperberg
During my daughter’s recent Senior Kindergarten graduation, I admired a fellow mother’s video camera. She told me she got the camera for free through her Air Miles points.
She went on to describe how she has perfected the art of collecting Air Miles, scoring free vacations and electronic equipment through years of devotion to the program. She uses an Air Miles credit card, only shops at stores affiliated with the program and even has her extended family collecting Air Miles on her behalf.
According to Colloquy, a loyalty program research group, consumer participation in loyalty programs is on the rise. Earning rewards on everyday purchases is a simple way to stretch household budgets during a recession.
I participate in the Aeroplan loyalty program. As someone who travels a lot, I collect Aeroplan miles through Air Canada and then accumulate more points using my CIBC Aerogold Visa. I’ve often put my points towards plane tickets for family vacations.
The Air Miles Reward Program and Aeroplan are the top two loyalty reward programs in Canada. There are over nine million active collectors of Air Miles in Canada while Aeroplan has four million active members.
A credit card attached to a loyalty program is a highly effective tool to making your money go further, according to personal finance expert Alison Griffiths. Putting items such as groceries and gas on the card add up and you can redeem points for movie tickets, gift cards, electronics and small appliances.
However, you still need to be disciplined credit card user. The goal is to use the card, earn the rewards, and then pay off the balance so that you don’t incur interest fees.
Alison also recommends picking one loyalty reward credit card and sticking with it to get the most out of it.
Numerous finance blogs have posted debates on whether to choose Air Miles or Aeroplan. For a comparison of the two, there’s a thorough post on blog Thoughts From My Life. In my opinion, you can reap good rewards from either program if you commit to using it.
On another note, the Best of the Money Blogs poll closes this Monday, so you still have time to vote. Two of my favourites – Million Dollar Journey and Squawkfox – are in the top three so far. Readers have submitted comments naming many other great finance blogs. One frequently mentioned is personal finance guru Gail Vaz-Oxlade’s blog. I’m a fan of Gail’s blog – she gives whip-smart advice on saving and spending and serves it all up with some sassy attitude.
