People can be suckers for rewards points, going out of their way to get a few extra clicks. But you’ve got to be careful to get the most out of the rewards points in the best way.

It’s not just rewards points credit cards to be careful with. We have wallets full of little plastic and cardboard cards for everything from coffee to Fly Buys. But customer loyalty doesn’t always add up.

Here’s the rub: rewards points do work is if you’re going to buy that item anyway. They also work if you have done the maths you’ve calculated carefully that the points will actually be worth more than shopping around. Otherwise don’t be deluded.

Credit cards
Sometimes our brains turn to jelly at the thought of ‘freebies’. But you’ve got to be careful to check the fees that come with a card as well as the interest rates. Analyse your spending behaviour before signing on the dotted line. If you don’t pay your card off in full each and every month and you’d be better off with a low-interest card. Your rewards points can be eaten up on the interest from one missed payment.

Fly Buys
When the catalogues arrive by mail we get all excited about the ‘free’ things we can get with our points. Whilst you’re not paying for points at regular shopping trips to the supermarket or when you pay your electricity bill, you are giving your data away. Beware of shopping at retailers solely on the basis of triple Fly Buys or signing up for utilities for the sake of Fly Buys or other rewards cards. Often it’s cheaper to shop elsewhere.

Coffee cards
We’ve all got a bunch of coffee cards or other frequent purchase cards in our wallets. Cafes and retailers use these to keep us loyal. But the basic rule is, do the points add up? If you can get a better deal elsewhere, then don’t be fooled. Also, make sure when you use your ‘free’ coffee that you planned to have a coffee anyway. If not, once again you’ve been fooled into thinking that this coffee is somehow different to one you paid cash for up front. You’ve paid for these freebies.

Petrol points
If you’ve the proud owner of a petrol rewards card don’t be lulled into filling up at that station without shopping around first. Petrol stations do very well out of rewards cards and supermarket vouchers. Have you checked, however, if it’s cheaper to fill up elsewhere? Often it is. Take time to work out which petrol station you pass on a regular basis offers the best prices consistently once you’ve factored in the ‘discount’. Plan to fill up around your trips out in this way and you can save hundreds of dollars a year. Also be very wary of 10c off offers. Invariably the petrol station has raised its base price for that period and you may still be better off buying your petrol elsewhere.

Don’t be a sucker
Beware. Rewards points expire and lots of us never get around to spending them. Don’t let this be you. Make sure when you review your finances (and you should be doing this once a year) that you redeem your points before you lose them.

Finally, don’t be caught by ‘mental accounting’. This is an in-built bias where our brains fool us into putting money from different sources into different buckets that can be spent differently. The reality is that money is money and should be treated the same. That goes right down to rewards points. They’re not found money. Use points tactically by spending them on something you really need rather than want. That’s the sensible thing to do if you want to outsmart your brain’s failings.

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