I'm enrolled in the rewards program of a certain bank. Spending at certain establishments earns me points at the rate of 1 point for every P400 spent. I can then spend those points with 1 point being equivalent to P1.
Now, getting P1 back for every P400 spent doesn't save siginificant amounts, but every little bit counts. Also, there are other ways I earn points. The bank awards a certain number of points monthly, depending on the account balance. For money (such as emergency funds) that needs to be put in low-risk vehicles a savings account with a rewards program might be a good choice.
Another way I earn points is through bill payments. I find this is a particularly nice way to earn points since
- I'm going to pay the bills anyway, points or no points.
- Points are awarded at a higher rate than for other payments.
There are of course, things to look out for when participating in a rewards program. These will make the difference between saving/earning and losing money on the program.
- Check the fees. If fees eat up most (or more!) of the points rebates, that's a losing proposition.
- Check prices in participating establishments. Switching stores just to earn points doesn't make sense if the new store has higher prices. Same argument for switching to a store that isn't conveniently located.
- Don't fall into the trap of spending more just to get points.