Diana Clement is a freelance journalist who has written a column for the Herald since 2004. Before that, she was personal finance editor for the Sunday Business (now The Business) newspaper in London.
Take the money. Kiwis love collecting Fly Buys, Airpoints rewards, hotpoints, True Rewards and others.
Yet points aren't free money. You've earned them. Now spend them wisely.
The idea that we assign different buckets according to where the money came from is a fallacy. If you want to makethe most of your points take them in cash (or petrol/grocery vouchers).
Do the maths. Do you know how many points you get per dollar of spend and how much each point is worth? Making a purchase decision because the retailer offers Fly Buys or Airpoints, can be a bad idea.
Always check the price of what you're buying on comparison sites such as PriceSpy.co.nz and PriceMe.co.nz. You may well find the item cheaper elsewhere.
A $30 petrol voucher on Fly Buys costs 240 points. For 240 points you can get among other things the Downton Abbey Season 1 DVD set. Sound good? The trouble there is you can buy the same set from The Warehouse currently for $20.
Double your points if you can. If I'm buying a large item anyway (or my groceries) I use a points card as well as my Fly Buys card. The trick here is that I'm not buying on credit. There is a direct debit at the end of the month to pay off the entire bill.
Beware of Airpoints style rewards cards. The simplest rewards credit cards are the cash-back ones. Yes, you can pool miles but Airpoints-style credit cards are complicated and it's easy to fool yourself into thinking you're getting a better deal than you are. For example, you often can't collect Airpoints on the cheapest Grabaseat fares or fares bought using Airpoints Dollars themselves.
If you are determined to have an Airpoints credit card of some sort, then read everything you can about maximising the value of them. The Australian-focused website Pointhacks.co.nz has some tips.
Yes you could use your points to get a Downton Abbey DVD, but it's only $20 at The Warehouse.
Beware triple Fly Buys points. There's a sure fire way to buy more stuff than you should and that's to go shopping for leisure because of a double or triple Fly Buys deal. The goods often cost more on the weeks when the best Fly Buys deals are available.
You can, however, be sneaky and do what multiple members of the Facebook group Cheaper Living New Zealand were reporting this week. Go back to the store as soon as the price drops and ask the retailer to refund the difference. It often works and you get to keep the points.
Get a cash-back or free credit card. Although the rewards dollars on many credit cards can be spent in store/redeemed on groceries and petrol, a cash-back card is one step better. Just remember rewards points cost you money if you pay interest on your credit card. If that's you you're better off getting a low-interest card and forget the points.
Use more of the benefits. Rewards/cashback credit cards often have other benefits. The ANZ CashBack Visa Platinum, for example, offers 0 per cent commission on foreign cash purchases. Do make sure that there's not a better deal on the foreign currency elsewhere. You may be able to get free travel insurance, but read the fine print. Some rewards schemes such as ASB and BNZ rewards cards allow you to invest your cashback in KiwiSaver. That's a win/win thanks to investment growth if you happen to have that bank's KiwiSaver.
If you're using a credit card for points, look at the annual fee as well as the number of interest-free days. If you pay interest on your credit cards that needs to go into the mix as well. MoneyHub.co.nz digs into the earning rate of various credit cards here: (tinyurl.com/MoneyHubRewards) and how much it costs to cover the annual fee.
Finally, if you do use rewards cards, make sure you always present your card and collect when you purchase. It can be easy to forget some of the lesser known deals such as Fly Buys on Petplan or State Insurance.
