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About a week ago, my sweetheart and I opened a joint checking account. It is a big step in relationship terms, but it can also be an important decision in your financial world. In the current economic climate, companies are doing everything they can to keep their customers coming back for more. Loyalty programs can be found for everything from Coca-Cola to cars. Be careful which ones you sign up for as they may have some not-so-obvious conditions or may not even be useful to you. Here are some things to look for before signing on the dotted line.
How Often Do You Purchase the Product?
I have a business card holder just for my loyalty program cards, so I can tell you for certain that they are plentiful and easy to accumulate. The thing is, in that little black book I have some cards that I haven’t used since the day I got them. Even if you carry a purse, wallet space is precious real estate. If you’re not going to use it, then you should politely decline, because odds are you won’t have it the next time you shop anyway. If you find later that you do, you can always go back and get it.
On the other hand if there is a product or service that you use regularly, then you should seek out that customer loyalty booster. If you’re going to shop there anyway, you may as well get what you can to make your money go that much farther. If the store you have been using doesn’t have one, do some comparison-shopping to see if you can find another store that does.
How High Are the Costs to Join?
We opened our account with Chase and took advantage of their Ultimate Rewards Program. At a cost of $25 per card, we evaluated whether it would pay off or not—our usage level suggested it would. I purchased the Starbuck’s Gold card about a year ago for the same $25 fee. I not only ended up spending a small fortune on coffee, but also didn’t even make back the purchase price of the card. Evaluating the true cost of the rewards program, how much you will have to spend in order to save, is something you should do before accepting that card.
Other things to consider are hidden costs, like mailing list distribution and time spent tracking program points. By creating a catch-all account to sign up for these types of programs, you can minimize the pain that the landslide of junk mail will cause. Even then, you’ll need to clean out the account every so often. Is keeping track of your points a pain? The best programs have in-store, automatic tracking that you don’t need a card for. Best Buy is a great example for that. With others, you just need to ask yourself if you are really going to carry the card, enter the code or save your receipts. If the answer is no, you’re not losing out on anything.
How Good Are the Rewards?
A great example of a rewards program that works is the one from Coca Cola. Being an avid Diet Coke drinker, my sweetheart racks up his Coke points pretty well. Their point system also seems fair for what you paid, and the rewards are generally not priced in the thousands. Cost to join: $0. In one week we had enough points for a 1 yr subscription to a magazine. The rewards catalogue has many other cool and interesting things, as well as a t-shirt and a beach ball.
It won’t take long and they are usually available online, but give their rewards catalog a gander before signing. If you’re just doing it because you may as well, then why go through the trouble of signing up, carrying the card and keeping track of the points? Another thing to consider is longevity. Do those points carry over? Or do you have a limited amount of time to accumulate them? Once you have earned a reward, does it expire? Or can you keep building in the hopes of getting something better?
Rewards programs started as a novelty idea and now they are basically a standard practice. They can either be a financial benefit or one more thing in your junk drawer. By asking yourself these three questions before signing up, you’ll reduce your junk mail, have fewer lower back problems from a wallet full of cards, and actually help reduce spending by using the coupons and sales that are sent to you. The same policies can be applied to store cards and credit cards as well. By all means, take what you can get, just make sure it doesn’t end up costing you.
Memorial Day weekend is a big time for BBQ’s and travel. My mother-in-law had a heart attack while visiting in Monterey, so, while it wasn’t a vacation, we did do some traveling of our own. Normally, I’m all about a road trip; but on this particular journey, we left with only an hour’s notice. Those of you who do the planning for the family know that last minute travel is the quickest way to exhaust your travel fund. If you follow five simple principles, last minute travel doesn’t have to cost an arm and a leg. Keep to a few unyielding guidelines and you’ll find out your vacation dollar is a lot more flexible than you may have thought.
