Loyalty Cards Think Again
Below is a MRR and PLR article in category Finance -> subcategory Other.
Loyalty Cards: Time to Rethink?
Are credit card loyalty schemes truly beneficial? According to a study by MoneySavingExpert.com, the answer is a firm no. The study examined 80 reward schemes and found Tesco's Clubcard, Nectar, and Airmiles to be particularly underwhelming. With Tesco Clubcard points valued between 1 to 4 pence, Nectar points at 0.54 pence, and Airmiles at 7.9 pence, it's clear why the results were disappointing.
Consider this: spending £10,000 annually could earn you rewards of just £50 with Marks & Spencer, John Lewis, and Asda. The Egg scheme offers only £10 per £10,000 spent, although the Egg Money Card provides a slightly better return at £100. With the Nat West Black card, you pay an annual fee of £250 to earn just £51 per £10,000 of spending. Are these savings even worth the effort?
Recently, the landscape of loyalty benefits has shifted significantly. Some large retailers have completely scrapped their schemes, while others have drastically reduced their rewards. Barclaycard has ended its partnership with Nectar, and Tesco has cut down its scheme’s value for new customers. Consumers are left confused amid these changes, leading to waning interest in loyalty cards.
The multitude of reward schemes leaves many consumers baffled, and strategic marketing makes comparisons nearly impossible. Retailers typically pay 1% to credit card companies, yet this benefit rarely reaches customers. Many feel that these schemes are just not worth it.
While the initial concept of loyalty cards?"encouraging customer loyalty and increased spending?"sounds appealing, the rewards are often insignificant. Discounts on goods, family outings, and flights are tempting but meager. It might be wiser to leave these cards at home, or better yet, switch to cards offering cashback and low interest rates.
American Express Platinum, for instance, provides 2% cashback if you spend over £7,500 annually, translating to £200 for £10,000 spent. The BAA Worldcard is more attractive, offering £795 for £10,000 spent, along with discount shopping vouchers redeemable at BAA airports in the UK. The GM card offers a £300 discount on new Vauxhall or Saab cars.
In conclusion, a cashback credit card might better serve you. With a wide range of options available, now might be the perfect time to make the switch.
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