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Do points mean prizes?

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From points and rewards to miles and airmiles, many providers of goods and services aim to win new customers and recognise loyalty to a store or brand by offering a range of bonuses which may be saved up and ultimately redeemed for cash paybacks or ever-popular deals and discounts on travel.

By earning those points, therefore, you may be effectively winning a prize whenever they are redeemed.

Making the most of any points, miles or airmiles you are offered, though, might take a little forethought and planning in how you accumulate them:

Know where the points are and how they work

  • the first thing to keep in mind is that any points scheme is designed to achieve one thing – to encourage you to spend more money, more often, to accumulate your points or airmiles;
  • in addition to knowing the range of transactions that attract points, therefore, you also need to understand how much you gain from how much you spend;

Credit cards

  • if you have or are accustomed to using a credit card, for example, you might want to consider a card that offers points or airmiles;
  • but keep in mind that you accumulate those points in return for spending on your credit card – and that spending attracts a high rate of interest you may need to pay, so diminishing the “prizes” you were aiming for;
  • to maximise the tally of points or airmiles you win, therefore, it is essential that you also make every effort to avoid the interest charges on your spending;
  • the Money Saving Expert, in guidance updated on the 7th of May, for example suggests setting up a direct debit to your credit card account, to ensure that any outstanding balance is paid off each month before the interest is charged;

Loyalty cards

  • to avoid the risk of having to pay interest on your credit card spending, a safer way to accumulating points and discounts are the loyalty cards and programmes offered by many stores and supermarkets;
  • they may be a safer bet because you earn your points, vouchers on future spending, discounts, or cash-back, solely on the purchases you make – without the risk of paying interest on those transactions;

Other loyalty schemes

  • other popular loyalty schemes may be found in the areas of travel and hospitality;
  • a number of chain hotels offer loyalty points for further overnight stays for which you may be awarded an upgrade in your next room, other discounts, or even free aeroplane tickets;
  • airlines themselves may also offer similar loyalty incentives through which you may accumulate points or airmiles on your next flight, upgraded seating or access to airports’ VIP lounges.

Using your prizes

At the end of the day, it is only worth striving to collect points, miles or airmiles, of course, if you want to win the prizes and intend to actually use them.

Cash-back deals and offers are clearly the most versatile, since you end up with the money in your pocket. Vouchers or discounts on future purchases are relevant only if there is a good chance of your wanting to shop at the same store again in the future, while airmiles or hotel loyalty schemes are unlikely to offer much appeal to the infrequent traveller.

This data is correct as at the time of writing. 

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