A lack of loyalty can cost you in numerous ways. One is the $205 you didn't claim last year.
That's right. The average American household belongs to 18 loyalty programs, from supermarket club cards to rewards credit cards to airline miles, according to a recent report by market researcher Colloquy.
Households rack up an average of $622 a year in rewards, points and other value. But about one-third, $205, will go unredeemed, the study found.
Of course, loyalty programs were invented to boost sales, not to aid consumers. But smart spenders know they can reap great value if they use loyalty programs to their advantage.
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Not all loyalty booty is worth chasing, but here's advice on how to maximize your return.
BE A JOINER
Joining rewards programs is typically free, but they require varying amounts of personal information.
Retail store cards usually require minimal information, so it's worthwhile to join liberally unless you're especially concerned about your privacy. Applying for a credit card requires far more information and will temporarily harm your credit rating because applying for new credit is a negative factor in determining your credit scores.
How much it will harm your score is a mystery because the formulas are secret.
KEEP IT ORGANIZED
Many retailers don't require you to carry loyalty cards or mini key-fob cards, allowing you to simply recite your phone number at checkout. That saves you from toting along a pile of plastic. But for those that require cards, consider combining bar codes from several cards onto a single card. A good online site to help is Keyringthing.com.
You also can use a smartphone app such as CardStar (Mycardstar.com) and Keyringapp.com.
LEARN THE RULES
American households typically belong to 18 loyalty programs but participate in fewer than half, the Colloquy study found.
That's understandable. Each program has different rules and benefits, and consumers have only so much time to devote to learning the programs.
And there are so many of them. Since 2000, the number of loyalty memberships in the United States has more than doubled, from 973 million to 2.09 billion. The key is to focus on the high-value programs.
SEEK HIGH-VALUE PROGRAMS
Free stuff, deep discounts and cash back should be high on the priority list. But the best programs will vary by your spending habits. The Best Buy Reward Zone might be a must-have for gadget geeks, while the My Starbucks Rewards program is essential if you stop at that coffee shop every weekday morning. The key is that you would shop there anyway, and the rewards are gravy.
JOIN MUST-HAVE PROGRAMS
FOR ALMOST EVERYBODY
Most people shop at supermarkets and drugstores, so theirs are programs worth learning. Supermarkets typically don't have store sales anymore; they have the regular price and the lower loyalty card price for sale items.
And frugality experts variously like the Walgreens, CVS and Rite Aid programs, which all have different rules. Unless you're really into it, stick with whichever drugstore you like best and learn its program well.
CONSIDER CREDIT CARD REWARDS
The main question on whether to worry about a rewards credit card is: Do you regularly carry a balance? If so, concentrate on paying it off or seeking a card with the lowest rates.
However, if you pay off the balance every month, now is a fantastic time to look at rewards cards, said Bill Hardekopf of LowCards.com.
"We're seeing a ton of activity among issuers when it comes to reward cards," he said. "They are sweetening the pot tremendously right now."
Hardekopf suggests cashing in rewards — whether cash, airline miles or merchandise points — as soon as you reach the threshold for redeeming them. "Use them before the program changes or they expire," he said.
LOOK FOR ACCELERATED REWARDS
Consider judiciously applying for a cobranded credit card or two for favorite brands, such as a retailer or airline. They often offer regular rewards for all purchases and bonus rewards for using their card for their own merchandise and services, said Kelly Hlavinka, managing partner at Colloquy. "That's a double-dip opportunity."
A caution: Don't get too carried away with loyalty programs and lose sight of tried-and-true smart tactics, such as comparing prices and judging whether you truly want to make the purchase at all.