Study: Canadian usage of loyalty points
CIBC of Toronto has released the results of a study of Canadian attitudes toward loyalty points. According to the report, consumers consider loyalty points received via credit card purchases to be "as good as cash." However, 64% do not think of them as a financial asset that can be used to save money or reduce debt. Approximately half of respondents said they collect points without a specific purpose, while 37% said they rarely or never redeem their points. The study found that loyalty program members possess an average of 48,800 points on their primary credit card. In addition, 68% of respondents were unaware that these points could be used to reduce their credit card balance or contribute to a registered savings plan. Seventy-three percent said they do not check the retail price of a purchase before redeeming points for it, while 71% said they do not compare redemption options to find the best value for their points.
"Canadians say reward points are as good as cash, but many aren't spending them to realize that value," said Jamie Golombek, managing director of tax and estate planning at CIBC. "It's important to think of your points as any other asset and use them to achieve a financial goal, whether that's to help with the cost of a dream vacation, purchase an item you'd otherwise buy with cash, or possibly reduce your debt or boost your savings. These lesser known financial opportunities that many cards offer can often get overlooked if you're socking away points without a plan to spend them or aren't sure what redemption options are available to you."