Rewards programs savings

Got a b’zillion points on your rewards cards? Redeem them!



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I bet there are a lot of folks who have points piling up. I have an Air Miles card and I use it to redeem for drugstore and grocery savings. My girlfriend, Sue, redeems her points for gas coupons. She’s saved about $200 in the last year. But the Air Miles process is cumbersome; you have to redeem in small increments and the lineup behind you doesn’t appreciate the time it take to scan in each of those coupons. That may be why I haven’t redeemed in a while.

I also have a PC MasterCard and the redemption process at the grocery store is way easier. I tap, they check points, I say how many I want to use, and BAM! Done. So I redeem my PC points all the time.

Some points cards, like the Shoppers Optimum, want you to carry points for longer so they ramp up the rewards the more you delay your redemption gratification. You have to weigh how long it’ll take to get to those higher levels against the opportunity cost of redeeming at the lower level. As long as you have a plan, you’re fine.

But leaving your points to gather dust like coins in your couch is pointless (ha!). In fact, those points are losing value every day as inflation ticks up. So this week grab all your points cards, figure out how much you have and what you can get for them and redeem.

Don’t forget the next important step: For every dollar you save by using your points, open up a “points savings” account and deposit the money. Now each time you use your points for anything—groceries, gas, travel, whatever—deposit the equivalent amount in real dollars into this savings account. Now you’re really saving with those points!

4 comments on “Rewards programs savings

  1. I definitely recommend your approach of using points dollars saved to put towards something you really want. Just make sure you aren't spending a bunch more money to accumulate those points.

    I also agree that keeping points for a long time (especially if you accrue them slowly) is a bad idea because points do lose value both due to inflation and the inevitable program changes that come along every few years. However, just up and redeeming everything all at once may not be the best idea. You need to weigh the benefits of the reward you can get now vs the reward you can get by waiting just a while longer. Take a few minutes and do the math, it can really pay off. Also do a quick internet search for the best reward value you can get for a particular kind of points.


  2. That's why I'm a big fan of the MBNA Smart Cash Mastercard. When you reach $50 worth of points, they automatically mail you a check for $50. No hoarding of points, and the reward isn't tied to any one vendor… just deposit it.

    The only thing is it can be sometimes nice to get the big payoff by hoarding lots of points towards a big ticket item. The $50 cheques just go into my day-to-day "operations" budget.


    • I definitely agree with you there. I think everyone in Canada who wants a no annual fee credit card should have a Smart Cash MasterCard in their wallet. Too bad TD bought MBNA and may end up discontinuing the card in a couple of years!


  3. I used to pay for my Starbucks habit by redeeming Air Miles for their gift cards…unfortunately they no longer do the Starbucks cards (so what will I do when I run out of my birthday gift card? *sigh* give it up, I guess.)

    Mainly I focus on my Club Sobeys card….gotten LOTS of free groceries already.


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