COMMENT
Are Loyalty Cards Worth Having?

How many cards do you have in your wallet or purse? We're not just talking about credit or debit cards, how about all of those loyalty cards lurking in there? There can't be many of us who don't have at least one – it seems that nearly every supermarket or petrol station offers one, and for those who tend to shop around, this can add up to a lot of plastic!

Of course, we all know that loyalty cards don't come for free. We're paying for their administration and other costs in the price of our shopping, which is why supermarkets such as ASDA (with no loyalty scheme in operation) can charge less for their goods.

In addition to this, a slightly more sinister fact is that retailers gain a lot of personal information about shoppers who have signed up for their cards. Apart from knowing how much you spend, how you pay for it and what you buy each time you swipe; you may have volunteered information about your employment and marital status too, in your application. And retailers use this information to target offers to try to encourage us to spend more, amongst other tactics.

But for those of us who choose to shop at those retailers who do provide a loyalty scheme (and don't mind being analysed!) it could make sense to pick up that piece of plastic. After all, you could argue that if you're paying for it anyway (through the cost of your shopping) you might as well get the benefits. And depending on how much you spend, those benefits can add up to quite a bit – with some even gaining the best part of a holiday from loyalty cards!

Looking at some of the most popular schemes we can see some are more points orientated, with others giving actual cash discounts.

You will generally get better value by using Tesco vouchers for deals than as 'cash off your shopping bill' instore – for example RAC membership will cost £11.25 in Tesco clubcard vouchers but is worth £45. If you were to use the vouchers instore, however, you'd only get the face value of £11.25 off your shopping. You can also trade in £2.50 clubcard vouchers for 60 Airmiles.  

In addition to this, trading in Tesco's clubcard vouchers for 'Clubcard deals' will increase each £2.50 to £10. You can spend these in restaurants such as "Café Rouge" or for days out and magazine subscriptions. Extra 'points per shop' vouchers are also sent out each quarter. And, you can also earn extra points on other spending if you take out Tesco's credit card (which is offering 0% on all purchases and balance transfers until 1st November 2005).

Nectar points can be collected from many places – and like Tesco vouchers also provide better value for those who use the reward vouchers than those that cash them in instore. Free days out, cinema tickets and travel discounts can all be redeemed and Nectar send out coupons to earn extra points on your shopping each quarter. A cinema ticket worth £7.50 can be purchased for 1000 points – but you'd only get £5 off your shopping for the same number of points instore.

Extra Nectar points can also be earned by taking out Sainsbury's credit card (you must choose nectar points rather than cashback) - currently offering 0% on all purchases and balance transfers for 12 months, or Barclaycard - currently offering 0% for 3 months for purchases, and 0% on balance transfers until 1st March 2006. However, Barclaycard only effectively gives 0.25 points for every pound spent (compared to the Sainsbury's card's 2 points) so be careful if it's the points that you're after!

Co-op and WH Smith's cards effectively give you 1% off your shopping, and Boots gives an excellent 4%. However, as with all loyalty cards we shouldn't get carried away with our allegiances – if the shampoo you buy is £1 cheaper elsewhere, is there any point in stubbornly buying it from Boots?  

So, to sum up, use the loyalty cards if you shop there anyway and don't mind your habits being analysed, to a greater or lesser extent. There are some good deals available that you can take advantage of – especially if you make the most of those "Get 1000 points if you spend £50" – save up and do a big shop! But don't lose your head and pay over the odds for the sake of a few points!