Things To Consider When Availing Of Rewards Programs
Rewards programs refer to those customer benefit programs offered by different organizations, usually banks and financial institutions, that aim to incentivize the customers into either availing products/services from them or using their platform to avail of the products/services of other companies. Rewards programs are usually based on points, which can subsequently be redeemed or claimed in exchange for various benefits. These benefits are typically in the form of cash rewards, discounts, vouchers, gift cards, or some other form of financial benefit.
One of the most popular rewards programs currently on offer right now is that of Chase through their Ultimate Rewards program. If you are curious as to how this program works or if you have a Chase freedom unlimited card and want to avail yourself of the benefits of this program, check out this link for a detailed Chase Freedom Unlimited review. In this article, we will talk about the things you need to consider and be mindful of when availing of rewards programs.
As we mentioned above, most of the rewards programs available today revolve around the concept of points. The way this works is that the company will reward you with a certain number of points with every purchase you make with them or through them. In most cases, you are awarded 1 point for every dollar you spend. However, this does not mean that you will effectively receive the value of your dollar back once you redeem it. This is where the concept of point rates comes in. Basically, your points are typically not 1:1 compared to the dollar in terms of value. Normally, points are going to be set at a lower rate. You can think of rates as this: with every dollar you spend, you can earn 1% back in value through points.
Take note of point rates.
In reference to the previous item, the value of your points will be driven by the point rates. The normal market rate for points is commonly set at 1 cent per point. This translates to 1$ per 100 points accumulated. The point rate will vary depending on various factors. For example, it could be based on the method of redemption you choose, such as when deciding between direct cashback or gift cards. It could also be based on the type of card, account, or subscription you have.
As we all know, companies like banks and financial institutions are fond of offering various tiers when it comes to their services. These different tiers will have their own set of benefits. In the same sense, these tiers will also feature different point rates if the company offers certain points-based rewards programs.
Mark points expiration date.
Companies impose expiration dates on the points that they give you so that you will be incentivized to redeem your points as soon as possible. As such, most points will only last for around a period of one year. However, some companies will also offer their points with a lifetime duration. Because you obviously want to accumulate as many points as you can, make sure you mark the date when your points expire so as to not waste any value out of the points that you have.
Prioritize bonus categories
Some companies will offer bonus categories as a means to further incentivize purchase activity in these specific areas. For example, companies may offer a higher points rate for those transactions relating to travel. There may also be instances when companies offer rotating bonus categories. Aptly named, this refers to a system of offering bonus categories that changes regularly by period. For example, the company may offer a higher points rate for gift card redemptions during the first quarter of the year. After the first quarter has passed, the points rate will return to normal, and the bonus rate will be moved into a different category, say, for example, cashback. In a rotating bonus category system, you need to be mindful of the timing of your transactions so as to maximize the number of points that you will get.