Be wary of loyalty card programmes, Consumer NZ warns

July 26, 2019

Consumer New Zealand chief executive Sue Chetwin gives her thoughts.

Don’t go to a shop specifically to use loyalty cards, instead treat them as a little bonus - that's the advice from Consumer NZ chief executive Sue Chetwin.

When it comes to the question of which loyalty cards work, Ms Chetwin says you have to spend over $12,500 a year to make credit card reward schemes work.

Whereas, fuel rewards cards only save people a few cents at the pump on these, but overall they cost money.

People should be wary of rewards programmes, Ms Chetwin told TVNZ1's Seven Sharp.

"I think the thing about [loyalty cards] is, is that they're just bonuses so I wouldn't shop on the basis of having one. I would use it if I was in a shop and thought, 'Oh hey, I can use this card here and I can get a bit of discount,'" Ms Chetwin said.

"The other thing about loyalty cards is data mining. They're collecting all your information, they might be using it to target you, selling it - they'll be doing all sorts of stuff with your information and that's really the purpose of many of these rewards schemes."

When it comes to programmes around credit cards, people needed to work out their spending.

"If you're a really big spender and I'm talking about $50,000 a year, you might get some value out of it, but you're not going to get a lot.

"You're actually going to pay quite a lot in fees so you kind of need to work that out and if you don't spend very much on a credit card, you're probably better to go with no rewards and no fees."

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