Only 9% of those who collect Airmiles have redeemed free flights in the last three months according to research from Morgan Stanley. Part of the problem with Airmiles has been that collectors have had to accrue a lot of miles in order to exchange them for a flight. However, Airmiles has recently slashed the number of miles people need to collect on numerous flight routes. You used to need 592 miles to get a return flight from London to Paris, but this has been cut to 400, and the number of miles required for a return flight to Marrakech has fallen from 2,674 to 1,500. This may lead to more people redeeming their miles, but there is no guarantee. Natwest, one of the main partners of Airmiles, has just announced that it is disbanding the Airmiles scheme, so it will become harder for consumers to accumulate miles.
Those who like the Airmiles scheme may therefore be better off switching to the British Airways American Express card. Rather than earning Airmiles, they will earn one BA mile for every pound they spend. But like Airmiles, these can then be exchanged for flights.
The reason why a lot of people fail to redeem their rewards is because the vouchers or tokens they receive are of no use to them. Tesco credit card customers, for example, earn clubcard points every time they spend on their card. They earn five points for every £4 spent in Tesco and one point for every £4 spent elsewhere. Tesco frequently has bonus offers which enable you to accumulate bonus clubcard points. Currently, anyone who buys life cover before May 23 will receive 2,500 extra points. Points are then converted into shopping vouchers once a quarter. This is a great loyalty scheme if you shop at Tesco, but if you don’t what is the point in having it?
Marks & Spencer has a similar reward scheme with its &More card. Customers earn one point for every £1 spent at Marks & Spencer and one point for every £2 spent elsewhere. Cardholders earn double points for the first three months. Points are then converted into reward vouchers every three months. Again, handy if you’re a fan of M&S, but not particularly useful if you don’t regularly shop there.
In addition to the BA card, American Express offers a Nectar card. Customers earn Nectar points every time they spend on their credit card. They can earn additional points at a number of retailers including Sainsbury’s and Debenhams as well as at BP petrol stations and EDF Energy. Nectar points can be exchanged for Sainsbury’s vouchers or for days out places like Madam Tussauds, cinema tickets and magazine subscriptions.
However, if you are the type of person who never gets round to claiming your rewards or leaves the vouchers gathering dust in the kitchen drawer, you might be better off opting for a cashback card.
With a cashback card you earn money every time you spend on your card. This mounts up over the course of the year and most card providers send you a cheque each year on the anniversary of you taking the card out. The advantage of this is that your reward is automatically sent to you, and because it is cash, you can spend it how you like.
Some providers are more generous than others with the cashback they give. Morgan Stanley’s cashback card gives 2% cashback until September, 1% o the next £2,000 spent on the card and 0.5% on any further spending.
The American Express Blue card gives 2% for the first three months, 0.5% on the next £2,000 you spend on the card and 1% thereafter.
Yorkshire building society, Smile, More Than and Lloyds TSB also offer cahsback cards. Yorkshire’s pays 1% for the first year and 0.5% in subsequent years. The other three providers give 0.5% cashback on all spending.
There are other cashback providers but their deals are not as generous as the
aforementioned.
