An employee at a Tim Hortons hands out a coffee from their drive-thru window in St-Bruno-de-Montarville, Que., on Sept. 29, 2022.Christinne Muschi/The Globe and Mail
As the year winds down, it’s time to review your loyalty programs. A simple check-up can ensure maximum value for your hard-earned points. And you can set yourself up for big savings in 2025.
Cash in your points and miles
Unless you’re saving your points or miles for a specific redemption, sitting on them is not the best strategy. Loyalty points have real value, so not redeeming them is like putting them in a savings account that earns zero interest.
When you’re ready to cash in your points, you want to try to maximize your value. For example, travel rewards programs typically give you the best return when redeeming your rewards for travel purchases. They may also offer gift card and merchandise redemptions, but they’re typically worth less.
There is one exception. Some bank travel rewards programs – such as RBC Avion and BMO Rewards – allow you to use your points for financial rewards, such as contributing to your registered retirement savings plan or paying down your mortgage. The immediate return won’t be as high as travel rewards, but it’ll likely be worth more in the long run, thanks to compound interest.
Shop around
Loyalty programs constantly change, so seeing what’s out there is always worth it. Recently, WestJet Rewards announced it’ll be more challenging to earn status in the new year. If you’re flexible with your travel plans, it’s worth looking into Air Canada’s Aeroplan since the program is more rewarding, and the airline and its partners fly to more destinations.
On the grocery front, Metro brought Moi Rewards to Ontario earlier in the year. If you shop at Metro or Food Basics, joining the program is a no-brainer. There’s also Loblaw’s PC Optimum program, which has great reach since you can earn points at Loblaw-owned grocery stores, Esso gas stations and Shoppers Drug Mart.
While it’s tempting to pick a grocery chain with the best loyalty program, choosing a store with the lowest prices will likely save you more money in the long run.
Think about an upgrade
Unless prompted, many people don’t think about changing their credit cards. However, even though you may have to pay a higher annual fee, having the right credit card could increase your return.
For example, the TD and CIBC Aeroplan Visa Infinite Cards provide the first checked bag free on Air Canada flights for the primary cardholder and up to eight travel companions. This can be especially handy now that Air Canada basic fares no longer allow free carry-on baggage.
The Scotiabank Gold American Express Card is another good example. The card has an annual fee of $120, but you earn six Scene+ points per dollar spent at Empire Co. Ltd. grocery stores such as Sobeys, Safeway, Foodland and FreshCo. Compare that to the Scotiabank Scene+ Visa Card, which earns you only two points on the same purchases but has no annual fee. You’ll cover the cost of the Amex annual fee in Scene+ points if you spend at least $3,000 on groceries. However, you may break even earlier since you also get an increased earning rate on gas, transit and streaming services. Plus, you get extra perks, such as no foreign transaction fees and airport lounge access.
Make sure your points don’t expire
Generally, most loyalty points will expire if your account is inactive for 12 to 24 months. Fortunately, there are many ways to prevent this from happening. The easiest way to keep your account active is to earn or redeem some points. Alternatively, you could transfer or donate some of your points if allowed.
For bank rewards programs, you usually need a credit card that earns points for your account to remain active. If you’re currently holding onto a credit card with an annual fee just to maintain your points balance, ask to be switched to a no-fee card that offers the same points to minimize your costs.
Set your goals for the new year
When setting goals and budgeting for the new year, using loyalty programs should be part of your planning.
For example, say your family plans on travelling this year. Signing up for the Marriott Bonvoy credit card can help reduce your accommodation costs since the welcome bonus is typically worth at least 50,000 Marriott Bonvoy points (a rough value of $450). An Aeroplan credit card is another option since you can use your points for flights and take advantage of the free checked bags.
Even a simple goal of saving money on gas can be accomplished with the right loyalty combination. If you link your RBC Avion card to your Petro-Points account, you get an instant savings of 3 cents per litre. Additionally, you earn 20 per cent more Petro-Points and Avion points. That’s a total of 7 cents per litre in value.
Barry Choi is a personal finance and travel expert at moneywehave.com. He was previously affiliated with RBC, BMO, WestJet, Aeroplan, Metro, PC Optimum, TD, CIBC, American Express, Marriott Bonvoy and Petro Canada but currently has no relationship with any of the brands mentioned.
