Americans may be crazy for couponing but Canadians have a bit of a loyalty program and rewards card addiction.
According to a recent RBC survey, half of Canadian reward holders carried four or more cards in their wallet in 2013, with rewards credit cards being the most frequently used.
Further to that, half of Canadian rewards cardholders use their rewards or loyalty cards two or more times in a week.
“Today’s rewards programs offer Canadians a lot of value,” says Donna Lue-Atkinson, vice-president of Global Loyalty Programs and Rewards at RBC. “Canadian reward cardholders are more engaged with their programs than ever – they’re looking for opportunities to earn and maximize their points collection while enjoying the benefits the programs have to offer.”
So much so that four in 10 rewards cardholders are more likely to shop at locations where they earn points.
Groceries are the top expenditure amongst rewards cardholders (28 per cent), followed by bill payments (12 per cent), dining (9 per cent) and leisure (8 per cent).
In terms of cashing in on rewards, over the past three years the top spoils and redeemed-for items of loyalty programs have been merchandise (47 per cent), gift cards / gift certificates (44 per cent) and cash back (27 per cent).
The Fine Print
While Canadians may be a bit “reward happy”, some rewards credit cards come at a certain cost in the form of higher interest rates or hidden fees.
According to a survey on reward credit cards released in the fall by American Express Canada, while 59 per cent of Canadians have been using their primary credit card for over seven years, only 15 per cent say they actually researched their options before signing on.
Over a quarter (27 per cent) admit to not even understanding what their rewards program offers them and 11 per cent feel confused or overwhelmed by the smorgasbord of choices and loyalty programs.
“It’s incredibly important for Canadians to do a little research upfront to ensure they choose the credit card that actually fits their spending habits and lifestyle rather than a default card provided to the masses,” says Brian Kelly, rewards expert and founder of ThePointsGuy.com in a press release with the report. “There are other factors to also keep in mind when selecting a card such as flexibility on how points can be earned, redeemed, and transferred – all valuable considerations when it comes to making your spending work for you.”
Tips For Navigating The Rewards World
While loyalty points don’t affect your balance, it’s important to keep track of your spending on your reward credit cards.
If you are struggling with debt, it might be wise to use a card with lower interest while you focus on bringing your debt down.
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Keep an eye out for bonus points on products you were going to buy anyways or might be in need of.
And most of all – always compare different reward credit cards online before you sign the bottom line.