res=en Kyrgyz Stock Exchange Press Club :: Economy for All :: Are you missing out on free cash?

  • 22 February 2011

    Are you missing out on free cash?

    Are you missing out on free cash?

    Yahoo!UK Finance, 16:18, Friday 18 February 2011

    Facing rocketing inflation and higher VAT a number of shoppers have turned to loyalty cards to fight rising prices.

    Research from YouGov revealed that 86% of shoppers use loyalty cards regularly, with three schemes leading the pack amongst shoppers: Tesco (66% of shoppers), Nectar Card (55%) and Boots Advantage (48%).

    Loyalty schemes allow you to collect points at specific shops, which can then be redeemed against goods or services. You are rewarded for making purchases by collecting points that are converted into vouchers and credits.

    Although you should avoid buying a product just for the points, loyalty schemes are generally a winner for customers.

    Bear in mind that that companies are not doing this out of the kindness of their heart. These loyalty cards are a way for retailers to monitor our spending habits and store the information to then target us to spend more.

    With so many schemes out there who actually benefits and are the schemes worth it?

    Tesco Clubcard

    You can accumulate points at Tesco stores, its website, offshoots such as Tesco Mobile and with E.on, the energy supplier. In most cases you will get two points for every £1 spent although when you fill up your tank you will receive one point for every £2 spent.

    If you spend £100 a week at Tesco, you will get 200 points per shop which adds up to 10,400 points in a year. This converts to £104 in grocery vouchers for the year or £312-worth of Clubcard rewards.

    These points can be converted into vouchers you can redeem at Tesco for food, clothing and household items - although they will be worth more if you choose to spend them on rewards at partners such as Fitness First, Pizza Express and Hilton Hotels.

    And you can boost your Clubcard points even higher, with the right credit card.

    The Tesco Clubcard Credit Card will give you additional points wherever you use it (one point for every £4 you spend) on top of the regular points a standard Clubcard offers for spending at Tesco.

    What's more, if you register for a Clubcard before 3 March, you will receive 500 free bonus points.

    As a pure credit card, it offers nine months on 0% balance transfers and 13 months interest-free on purchases. If you need to make an expensive purchase you can use the card to pay over 13 months and avoid incurring costly interest, while accruing Clubcard points.

    When the interest-free period expires, you'll revert to an APR of 16.9%. Therefore it's wise to ensure you clear the cost of your purchases before the offer expires and interest kicks in.

    Apply for the Tesco Clubcard Credit Card

    Nectar Card

    With the Nectar Card you can collect points at more than 500 retailers in the UK such as Sainsbury's, Homebase, BP and Ticketmaster.

    You will generally earn two points per £1 spent, but you could earn extra Nectar points with double points incentives on specific purchases.

    You will earn 10,400 points annually if you spend £100 per week at Sainsbury's which is equivalent to £50 a year to spend at selected retailers across the UK.

    And if you use a Sainsbury's credit card you will receive double the amount of Nectar points on every spend.

    As a credit card, the Sainsbury's card offers 12 months interest free on both initial purchases and balance transfers (with a 3% fee for the latter), making it a solid all-round card. After the initial 12 months, you will be charged 15.9% interest.

    Recently British Gas has joined the scheme and offers customers 100 free bonus points for linking their Nectar Card to their British Gas account. It claims you could collect 1,800 points per year simply by being a dual fuel customer and submitting your own meter readings.

    Receiving your gas or electricity through British Gas qualifies you for 200 points and you'll get an additional 400 points if you're a dual fuel customer.

    Paying your bill by direct debit earns you 800 points, while submitting your own quarterly meter readings earns 400 points and switching to paperless billing a further 250.

    Apply for a Sainsbury's credit card

    Could you save on gas and electricity?

    Boots Advantage

    With a Boots Advantage card, customers generally earn four points per £1 spent for any Boots purchase, either in-store or online.

    You can redeem the points at the same outlets including Boots opticians as well.

    Other alternatives

    If you do not want to go down the loyalty card route, there are other options for credit card rewards.

    The American Express Platinum card offers 5% cashback in the first three months where you could earn up to £100. The card comes also offers a six month interest-free period but its important to remember that after the six months have elapsed you will face a 19.9% APR.

    The Capital One World MasterCard can net you 1% cashback on all purchases and comes with a much lower 12.9% APR with no interest-free period.

    The Lloyds TSB Airmiles Duo Credit Card can get you two free flights in the first three months. You will earn one mile every £1 you spend.

    There are many advantages to having a rewards card. Some, if used correctly will earn you hundreds and even thousands a year.

    It's quite simple, if you spend on the card you will earn money and it will cost you nothing - as long as you pay the balance of the card off in full each month.

    However, taking advantage of these cards requires disciplined spending. Only spend what you can afford, because if you're not careful and are hit with interest or fees, you may end up paying a lot more than you bargained for.

    Author: Daniel Milano
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