I love reward programs. I’m basically getting something free for doing something I planned on doing anyway.
Reward programs are a way for companies to attract new customers and show appreciation to existing ones. These programs allow customers to earn a reward for using the company’s services/products. These programs are not drawings or giveaways, where only a few individuals benefit based on some luck of the draw, but a program with established rules, regulations and guidelines. So anyone who meets the guidelines can participate and benefit from them.
While I’m not aware of every type of reward program, the popular ones generally fall into one of these three categories:
*Services – These programs offer a free service based upon your usage of their existing services. For example, a salon may offer a free manicure after 6 paid services.
*Points – While credit cards are very popular in this category, other companies offer this as well. For example, I have a Subway card (not a credit card). I accumulate points for every purchase I make at Subway. Based upon their point value chart and the number of points I have accumulated, I can get something off their menu for free.
*Cash-back – Just as the name implies, you get cash back. Again, credit cards are very popular in this category, but I would also include rebates in this one as well. Typically, for every dollar you spend on a qualifying product or service, you can get a percentage or a pre-determined amount back, either as a deposit into your bank account, a check in the mail or a credit on your statement (cash back terms vary by company).
Just like everything else in life, all reward programs are not created equal. The program is usually based upon the products/services the company offers. So look for a program that will line up with your desires and goals. Remember when I said these programs have rules, regulations and guidelines? Well, that’s what you want to review to determine if a program works for you. I always look for the reward terms, how to earn it and how to spend it/get it. Don’t just focus on the big words on the ad or commercial. Look for the terms.
When money and time allow, I love to travel. For this reason, one of the reward programs I participate in assists me with my traveling desires. I have a credit card that allows me to earn so many points for every dollar I spend. So you better believe I use my credit card at every possible opportunity (always intending to pay the balance in full each month). Let me clarify, I use my credit card for everything that I would normally pay for in cash, i.e. gas, groceries, utility bills, gym membership, home repairs, car repairs, tithe and offerings (yes, I earn points at church too!), etc. . . As a result, I’ve purchased several bus, train and plane tickets, as well as hotel accommodations at a cost of $0.00. I’ve visited Washington D.C., New York, Jamaica and other places with little money out of pocket (mostly spending money).
I mentioned above how my intentions are to always pay the balance in full every month. This is because, in my mind, a reward is not a reward if I have to pay for it. When I pay interest, I am paying the credit card company for allowing me to use their services as oppose to them paying (”rewarding”) me for allowing their services to be used by me (please read this sentence again).
Please note, the “charge everything method” to obtain reward points or cash-back is not for everyone. When it comes to handling credit cards, please be truthful with yourself. If you have a habit of overspending and carrying balances from month to month, do not practice this method. Doing so may cause you to come out on the losing end. There are plenty of reward programs, find those that will work in your favor.