The typical Canadian has over half a dozen rewards cards in their wallet at any given time. It seems like every retailer (large or small) has their own rewards card and loyalty program, along with incentives to save money if you join. So how do you know if you’re truly maximizing rewards and saving money?
You should do a quick review of your spending habits to determine which loyalty programs offer the best value for your situation. Let’s take a look at 3 typical Canadian families and try to help them maximize rewards and save money.
Family #1: Newlyweds on a Budget
Todd and Tracy are newlyweds and their budget is stretched to the limit. The good news is they have no consumer debt and have using a budget to track their spending habits. Todd earns $50,000 a year as a sales manager, and Tracy earns $25,000 a year as an administrative assistant. They do their grocery shopping at a nearby Safeway, and try to time their big monthly shop around Customer Appreciation Day where they can earn bonus Air Miles or 15 percent off their groceries. Their monthly spending outside of housing costs is approximately $1,500.
- Loyalty Program – Air Miles is one of the most popular loyalty programs in Canada, with over 10 million active collectors across the country. Since Todd and Tracy already shop regularly at Safeway, spending roughly $500 per month on groceries, they should be using an Air Miles card to earn rewards. By shopping wisely and taking advantage of bonus Air Miles at Safeway and other sponsors they could earn around 100 Air Miles each month. That may not sound like a lot, but over a year those Air Miles can be redeemed for seven nights out at the movies, or $140 in gas gift cards from Shell.
- Credit Card – A no annual fee, cash back reward credit cards like the MBNA Smart Cash Credit Card is perfect for a family on a budget. No points to redeem, no travel miles to save up, just straight cash back. This credit card offers 3% cash back on the first $600 spent on groceries and gas each month, and 1% cash back on all other purchases with no maximum limit. By using the MBNA Smart Cash Credit Card for all of their monthly purchases, Todd and Tracy can earn rebates of close to $30 each month. That’s $360 cash back in their wallet each year.
Family #2: Single Income Family with Two Kids
John and Sarah have been happily married for 5 years and have a three-year old son and a two-month old daughter. While Sarah stays home and looks after the kids, John is an engineer earning $100,000 a year who commutes 90 minutes each way from their suburb home to the city. Once a month, John has to fly to the company head office for meetings. They prefer a one-stop shop where they can pick up their baby supplies, groceries and clothing at the same time. Their combined monthly spending outside of housing costs is approximately $2,500.
- Loyalty Program – Aeroplan is one of Canada’s most popular loyalty programs and members can earn Aeroplan Miles at over 75 sponsors. John can earn points on his monthly flights with Air Canada, on his frequent fill-ups at Esso, and at Home Hardware when working on the next home reno project. John and Sarah can redeem their Aeroplan reward miles for products like Toys R Us gift cards for the kids, or for a weekend flight to Las Vegas.
- Credit Card – The PC Mastercard has no annual fee and cardholders can earn a 1% rebate on any purchase. The rebate comes in the form of PC Optimum Points, which are redeemable at any President’s Choice location. This no hassle rewards credit card will earn John and Sarah up to $25 per month, which they can redeem for free groceries or baby supplies.
Family #3: Double Income, No Kids
David and Cindy are both in corporate sales and they love to travel whenever they get the chance. Their combined income is over $150,000 a year and they easily spend in excess of $4,000 a month outside of their housing costs.
- Loyalty Program – WestJet offers a frequent guest program called WestJet dollars. This program is perfect for frequent fliers like David and Cindy. If you spend more than $1,500 a year flying with WestJet, you’ll earn 2.5% of your eligible spending in WestJet dollars that can be used like cash towards the purchase of WestJet flights. When your annual spend reaches $4,500 you’ll earn a free companion flight anywhere WestJet flies in Canada.
- Credit Card – The Capital One Aspire World Mastercard has long been known as the best travel rewards credit card in Canada. No matter where you use this card, you’ll always earn 2 reward miles for every dollar spent. With David and Cindy spending over $4,000 a month on their credit card they can earn nearly 100,000 reward miles plus an additional 35,000 bonus reward miles in the 1st year of signing up, and 10,000 reward miles each year on their anniversary. 100,000 miles can be redeemed for $1,000 in travel.
What Rewards Cards Are Right For You?
Remember that you need to match your rewards cards and loyalty programs to your spending habits in order to get the biggest bang for your buck. Utilize these cards for all your daily spending, from groceries and gas, to monthly bill payments, and watch the savings add up.
By using these tips you can maximize rewards and save money, or save up your points to take your dream vacation.