All of us benefit from different reward points programs. This is the result of the effort in marketing department of various companies.
The marketing department is in charge of branding, and building customer loyalty.
They know that reward points programs are tools to keep the customers.
For example, the customers are not likely to cancel the credit card if they are happy with the credit card reward points programs.
Many customers love the idea of accumulating enough points to redeem a free air ticket.
They like the idea of using credit card to make payments for grocery, utilities, and other expenses, and earn a freeair ticket to exotic destination.
That is why all credit card companies have different forms of reward points programs. The customers view the marketing effort positively.
That means they see it as a form of reward rather than a trap.
The customers are unlikely to see it as a marketing trap to get them to spend more money, even though they know in their hearts of heart that the marketing department works for the company, not for the customers.
The executives in the marketing department care about the profitability of the company, and not the personal finance of the customers.
They are not likely to encourage customers to save money. They want customers to spend more and more money.
That is why many reward points programs have incremental system. The more you spend, the more points you have.
Many shops and hotels follow the same system. All airlines and casinos have similar systems.
The air mileages and the comp points are part of the reward points programs.
The airlines reward frequent flyers by allowing them to accumulate air mileages in exchange for free air ticket.
The casinos reward the customers by allowing them to accumulate comp points and redeem meals and hotel rooms.
In modern society, it is hard to avoid reward points programs.
Nearly all the large supermarket chains have it. Nearly all the shops have it. When you subscribe to the cell phone subscription service, you start toearn points too.
When you join the reward points programs for the airlines and hotel chains, chances are you will stick to the airlines and hotels forever. The tendency is for you to spend money buying air tickets than to travel by rail. You certainly want to get enough points to redeem a ticket to the faraway country.
If you want to earn enough to redeem a First Class ticket, you would need to buy more air tickets or spend more on your credit cards.
The only reason to change is when the service standard is really lousy, or the price increases too much.
As a customer, you can remember that the intention of the reward points programs is to get you to spend money. Do not fall victim to the sweet talk of the marketing department, about how they value you as the customers.
The minute someone spends more than you, that someone becomes the valuable customer. The company values the persons who spend more money than you.
Is it worthwhile to spend more money to gain more points? Think about this question before you start to part with your money.
Scheng1 is a passionate blogger from Singapore. Rich in every sense reveals my deep desire in enjoying life, and be rich in every possible ways. Personal Finance is about money, from making money to investing money. Retirement in Asia contains resources on retirement planning.