You may have heard about credit score, credit history, credit report and so on. If you haven’t paid much attention to these terms in the past, then sit up and take note. Because your credit score has the ability to make or break your application for credit.

What is a credit score (credit rating)?

It is a number determined by a credit
bureau based on your credit history over a time period. Your credit history constitutes all the information regarding your credit habits, and a credit report is the document logging it.

Credit bureaux

There are three major credit bureaux: Transunion, Experian and XDS. Each has its own formula for determining credit scores. Hence you will have a different rating from each.

Credit bureaux credit score ranges

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Lenders may look at your credit record from one, two or more credit bureaux before deciding whether or not to grant you credit. Some financial institutions compile their own information regarding your credit habits.

Every aspect of your credit behaviour is recorded and goes onto your credit record, like when you pay a bill or take out further credit. Creditors upload information to the National Loans Register monthly which then gets passed on to the credit bureaux. Therefore your credit score changes all the time.

Why do you need to know your credit score?

It influences your ability to obtain credit and the best interest rates. You could be denied credit if you score low, and if you do manage to obtain credit, you could be charged high interest rates.

Knowing how you score and taking proactive steps to keep it above par could mean the difference between getting your home loan or not. Depending on certain credit providers’ business model, an excellent credit score is 575.

What impacts a credit score?

• The amount and severity of late payments
• The type, term and number of accounts
• Total debt
• Outstanding debts
• How often you apply for new credit (including co-signing for a loan)
• Public records such as administration or judgements, etc.
• Enquiries by lenders

How can you improve how you score?

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So now you can see why knowing how you rate is so important. It influences your creditworthiness and impacts on your ability to obtain credit and whether you will pay prime for interest or be taken to the cleaners.

Tip

• Don’t use credit repair agencies

FACT

• Having too little debt can count against you as creditors won’t be able to determine your payment habits and therefore not trust you

The post Here’s Why You Should Know Your Credit Score appeared first on Financial Tips and Tools for Everybody.

Society’s dictates about living above your means have left most consumers struggling to manage their debt. If this sounds familiar and you are in the same boat, a debt consolidation loan could hold the answer.

What is Debt Consolidation?

Debt consolidation is the merging of all your accounts into one payment. Essentially, you’ll be taking out one loan to pay off all your other debt. The main advantage of this is to gain a lower interest rate and the convenience of having only one installment.

How can Debt Consolidation help you?

• It makes your debt easier to manage, as you’ll only have one payment.
• This can help you to pay off your debt faster.
• You’ll have a lower monthly installment, and therefore, a better cash flow.
• The interest can be much lower than credit and store cards.
• It can salvage a low credit score, e.g., instead of skipping payments because of many accounts, you now only have one payment to focus on.
• You’ll have a fixed interest rate, which can help you budget ahead and know exactly where your money’s going.

Read More About the different debt consolidation types

A few things to watch out for

• The loan term will be longer, which increases the total interest paid over the term.
• Moneylenders may persuade you to take out more than you need, which leaves you with a larger amount to pay back.
• You may be tempted to spend more and end up incurring further debt.
• You may not be offered the best interest rate, as lenders, in essence, are selling a product, and their first priority is to make a profit.
• Lenders may downplay the negative side of taking out a consolidation loan, like loan terms and other fees.
• Consumers with a lot of debt or a bad credit history may not qualify for the lower interest rates.
• You could land in difficulty if your lender goes out of business and passes your loan on to an unscrupulous third party.
• It can hurt your credit rating if you are taking out a very big loan.

Debt Consolidation for the Blacklisted

Lenders offer these to consumers who have a poor credit rating for being blacklisted, having defaults or judgements, etc. These lenders do not require that you put up your home or car as collateral. It would be difficult to get a loan from a bank if you were blacklisted, as banks have a strict qualifying process for which you have to have a spotless credit record. Taking out a consolidation loan if you have a bad credit history won’t give you the benefit of a lower interest rate.

Although debt consolidation can seem like a lifesaver, it’s wise to remember that using this option does not eliminate your debt, but merely moves it around so that your payments are easier to manage. The debt is still there, and still has to be paid. Debt consolidation will be beneficial if you focus on paying off your debt instead of incurring more.

*Please note that LoanFinder SA is not a financial institution, and do not offer financial advice. Be sure to consult your financial advisor before making any monetary decisions.

The post Find Out How Debt Consolidation Can Help You appeared first on Financial Tips and Tools for Everybody.

5 Debt Consolidation Types

We’re bombarded with so much information on finance management that we don’t know where to turn. If you’re thinking of debt consolidation, here are 5 types to choose from:

1. Home Equity
   This is a second mortgage against the equity in your home. They come in two forms:
   • Home Equity Term (HET), which is a lump sum loan for a fixed term at a fixed interest rate.
   • Home Equity Line of Credit (HELOC), which is a type of revolving credit loan with an adjustable interest rate that you can borrow against whenever you choose.

   To qualify, you need a good to excellent credit record. You interest rate is lower, as your house is the collateral. However, you risk losing your home if you renege on the repayments.

2. Personal Loans
   You can take out a personal loan to consolidate your debt. There are two types:
   • Secured loan where you put up your house or car as collateral. The interest rate is lower. However, the lender has the right to seize your asset if you miss your repayments.
   • Unsecured loan where you don’t put up any assets as collateral. The interest rate will be higher, because the lender is taking a risk if you cannot make repayments.
3. Debt Consolidation Loans
   Debt consolidation loans work in two ways:
   • The lender can offer a personal debt consolidation loan where the money is transferred into your account, and it’s up to you to settle your bills. Although this is, in effect, a personal loan, it still falls under the heading of a debt consolidation loan. The interest rates will be higher, as the lender is taking a risk in not knowing if you will use the money to settle your debts.
   • The lender can directly settle your accounts with your creditors, leaving you with only the lender’s loan to pay off.
4. Credit Card Transfers
   You move the debt of all your cards onto one credit card. Some companies offer promotions with low interest for a period, whereafter a higher interest rate kicks in. If you use this option, the credit card company will pay off your other cards, and move the debt onto your new credit card. You save if you can pay off your debt within the low interest period. But be aware that your credit score will suffer, as you’re putting all your debt onto your credit card.
5. Debt Consolidation Agencies and Debt Management Programmes
   A debt counsellor can manage your debt for you. You can apply for debt review (only if you’re over-indebted) where a debt counsellor negotiates with your creditors for reduced monthly payments. You pay one fixed amount which is apportioned to all your creditors over a set term.Although there are quite a few ways to consolidate your debt, be sure to do your research to see which one will work best for you.

*Please note that LoanFinder SA is not a financial institution, and do not offer financial advice. Be sure to consult your financial advisor before making any monetary decisions.

The post 5 Debt Consolidation Types appeared first on Financial Tips and Tools for Everybody.

Debt counselling is available to South Africans who are living under a yoke of debt that they can no longer manage. So, if you’re battling to cope with your debt, and it’s having a negative impact on your family, job and mind, there is a solution. If you’re experiencing sleepless nights from stress because you can’t handle your bills, and creditors are hassling you with phone calls and threats to make payments, you could find relief in the form of debt counselling.

Consumer debt counselling was introduced by the National Credit Regulator (NCR) as a solution for many South Africans to relieve the burden of over-indebtedness. This means that if you’re over-indebted you can employ debt counselling to help manage your debt.

A Debt Counsellor can Provide the Following Services:

1. Offer you advice, help and information on budgeting, debt management and solving your everyday financial problems.
2. Negotiate with your creditors on your behalf (if you’re over-indebted) for a reduced monthly payment. In such a case, a debt-restructuring programme, called debt review, can be put into place.

How can you Benefit from Debt Counselling?

• Creditors may lower your interest rates and you could pay low or 0% interest.
• You’re protected under the NCA in that your creditors cannot take legal action against you, nor harass you with phone calls for payment.
• You don’t have to declare bankruptcy, which could seriously damage your credit score.
• You’ll be able to afford your monthly payments.
• You don’t have to deal with your creditors directly; your debt counsellor will liaise with them.
• Your debt is consolidated, so you only make one payment (including the monthly debt counselling fees).
• Your debt counsellor can negotiate better repayment terms with your creditors than you.
• Your assets cannot be repossessed.
• You’ll have a chance to repair your credit status, and you cannot be blacklisted while under debt review.
• You can withdraw from the process at any time (in this case, you will have to resume normal payments under your original credit agreements).

You don’t have to feel hopeless because of unmanageable debt. Debt counselling lets you take control of your finances without sacrificing the necessities of your daily life. You’ll have that peace of mind and confidence that you are doing something positive to get back on track.

*Please note that this article is for the purpose of conveying information only, and is not to be regarded as advice of any kind. LoanFinder SA is not a financial institution, and do not offer financial advice. Be sure to consult your financial advisor before making any monetary decisions.

The post Debt Counselling: How To Get Out Of Debt appeared first on Financial Tips and Tools for Everybody.

Qualifying for home loans has become more difficult since the National Credit Act was implemented and the start of the global economic crisis. To qualify for a home loan if you are a first-time buyer, your bank will require that you meet the following criteria:

• Have a stable steady income , you will need to provide proof of this in the form of a payslip or audited financial statements
• Qualify for the loan in terms of the banks affordability criteria and be able to afford the monthly bond payments
• Have a clean credit record , if you have any default judgments or listings the bank will turn down your loan application
• The bank may apply additional conditions at its discretion.

The different South African banks may apply different conditions when considering your application, but these are the core conditions that you should be able to comply with in order to qualify for a home loan.

Here are a few pointers and advice to get you qualified for that home loan:

Stable and Steady Income

If you are employed and receive a payslip the banks will feel more comfortable in providing you with a home loan. People that are self employed will need to provide the bank with a great deal more information to qualify for that home loan. The bank will require that you provide them with your latest set of audited financial statements as well as 6 months bank statements – the bank wants to satisfy itself that you are able to generate an income to cover your bond payments. If your business is still new or not generating the desired level of income it would be prudent to hold off on your bond application until you and the business have built up more of a track record.

Banks Affordability Criteria

You have a steady income , but based on the banks affordability criteria you don’t qualify. You could always consider applying at another bank as the various South African Banks have varying affordability criteria , however this is only likely to work in marginal cases as essentially the banks consider the same facts.

You need to identify what the problem areas were in your application and to address these issues. Often applicants are declined because their debt levels are just too high and a significant portion of their income is used to service debt. The only advice here is to reduce your debt levels to acceptable levels before reapplying , you can do this by cutting your expenses and paying off more debt. Always pay off the most expensive debt first and work through your debts systematically. As you pay off more debt increase you repayments on other debt items until your debt levels become more manageable.

Another problem area causing your bond application to be declined is that your income is just too low to service the bond. Your options are to shop around for a more affordable property that you are able to finance. Another sensible approach is to save towards a bigger deposit making the property more affordable. You can also try increasing your income – tough in these economic times.

Clean Credit Record

This is where most people fall short with their loan applications. Before approaching your bank for a home loan always check out your credit profile before applying. You can do this at the major Credit Bureaus, Transunion and Experian – they may charge you for the credit report , but is well worth the expense.

If your credit record has a few blemishes you may need to clean it up before applying for a home loan. Where you are listed as a slow payer by a creditor , you should get your payments up to date asap and conduct your account in a more responsible manner. Afterwords  approach the creditor and ask them to remove the slow payer status.

Where a creditor has obtained a default judgment against you the situation become more tricky. You will have to pay the debt in full and ask the creditor for a rescission of the default judgment. Approach the creditor before paying the outstanding amount , make them an offer to pay off the entire amount and costs in exchange for them having the judgment rescinded.

In cases where you have paid the entire debt , but you are still reflected on the credit bureau you should obtain a letter from the creditor stating that the debt has been paid in full. It is always best however to try and get the listings removed as it just makes the bond approval process easier.

The post How To Qualify For A Home Loan To Buy Your Dream Home appeared first on Financial Tips and Tools for Everybody.

A solid credit score is a very important component of your overall financial health and well-being. Unfortunately, building your credit score takes years of consistently hard work. And, even more unfortunately, it can all come crashing down at the slightest mistake.

Though improving your credit score can be difficult, it doesn’t mean that it is impossible. The methods discussed below will help you bump up your credit score, one little step at a time, starting today. Follow through with these tips and keep up on (or pay off) all your bills and loans and you’re looking at improving your credit rating in no time.

1. Authorized User

Those with poor credit often find they have trouble getting a new credit card. Most providers simply do not want to give credit to those that have a history of misuse or abuse with them. Instead of tracking down your own card, it can be beneficial to ask a family member with a high credit rating to add you onto their account as an authorized user. This gives you the means to a credit card and will actually immediately boost your score as well. Your family member’s good credit basically rubs off onto your score.

2. Credit Score Report Errors

Another surefire way to raise your credit score is by checking your credit report often. Over 75 percent of credit reports have been shown to contain at least one mistake. And 25 percent of these mistakes were so serious that they could lead to you being denied credit. If you catch a mistake on your report, you can clear the error up by contacting the major credit bureaus.

3. Rapid Rescoring

Rapid rescoring doesn’t work for everyone but it can quickly improve the credit scores of those eligible for it. You are generally eligible if there is a known error on your report and you can prove that it is an error. Rapid rescoring is also almost only offered to those about to buy a new home. If you qualify, your score will be recalculated, minus the error, in less than 72 hours.

4. Automated Payments

One of the biggest credit card mistakes that people make are late payments One of the most important tools for your financial success is a credit card for your credit rating, but using yours incorrectly can have seriously negative consequences. Automate your bill payments online so that you never forget to make your monthly payments again.

5. Explain Yourself

Many people suffer from low credit scores for reasons irrelevant to the new loan or credit card they are attempting to get. Simply writing a short note explaining your circumstances can do a lot to ensure creditors that you are not as big of a risk as your credit rating indicates.

6. Make Two Payments a Month

Using a credit card to charge too many purchases each month can be harmful to your credit rating. If you find yourself nearly at your credit limit each month, it can be beneficial to make payments twice per month. In other words, you would be paying your monthly bill off in two installments. Surprisingly, keeping ahead of the game this way can actually bump your rating up a few notches.

7. Pay Down Cards

Your credit rating is affected by your total available debt-to-credit ratio and the available debt-to-credit ratio on each of your individual cards. If you have a credit card that is very close to its limit, it could be seriously damaging your overall score. Pay this card off before the others and you’ll be in the clear.

8. Diversify

There are many types of credit out there and having only one could impact your score. For example, someone with only revolving credit could get a credit score boost from securing another type of loan such as a car loan. There is no reason to rush out and get a new loan just for the sake of it, but if you’re in the market, it could definitely help your credit record.

A solid credit score or rating is incredibly important to your financial health. Responsibly using a credit card for your credit rating and taking into account the eight tips discussed above can greatly help you improve your score. While it takes a long time to actually boost your score, there is no reason why you shouldn’t get started today.

Laura Ginn knows that by choosing the right credit card you can help improve your credit rating, providing that you make your payments on time. Find out more about improving your credit rating on the uSwitch.com website.

The post Credit Cards: 8 Surefire Ways To Improve Your Credit Score appeared first on Financial Tips and Tools for Everybody.

The changeable, economic landscape of recent years have landed many South Africans in a sticky financial situation. If you need blacklisted vehicle finance, but are being refused because of your bad credit rating, your situation is not impossible. Lenders have now made vehicle finance for blacklisted consumers more attainable.

Blacklisted Vehicle Finance: 3 Available Options

1    Micro Loans

Micro lenders provide blacklisted vehicle finance to the public. To qualify, the lender will assess how you manage your debt and if you can afford the loan. You won’t qualify if you are under debt counselling, debt review or debt administration, and some lenders may even decline you if you have judgements. You have two options: an unsecured personal loan or vehicle finance (micro asset finance).

Unsecured Personal Loan

You must be permanently employed for at least three (or six) months and earn a basic salary. Most lenders offer loans up to R15 000. Depending on your affordability you could pay as much as 60% interest per annum. This might seem like an exorbitant amount to pay for interest, but at least you’ll get your car.

Vehicle Finance

If your affordability is poor, you could consolidate your debt, leaving you with lower monthly payments, better cash flow, and ultimately improve your credit score, allowing you to afford further finance. Once you have proved to pay your accounts on time for a minimum term of three months, you could get vehicle finance in South Africa, of up to R80 000 and pay interest up to 25%. You will be required to pay a deposit. Lenders will accept no residual values, which means you have to pay back the full loan. If you renege on your payments, your car can be repossessed.

2    Rent-to-own

You rent the car from month to month, and at the end of the renting term, it becomes yours, or you could return it for another rent-to-own car. The car does not belong to you, but to the dealership you’re renting it from. You may be required to pay a deposit. Your monthly payment may include the following fees: insurance, tracking, warranties, etc. You can give one month’s notice at any time if you want to cancel the contract. You are responsible for servicing the car and liable for any traffic fines you incur. This option can help you improve your credit score if you make your payments on time.

3    In-house Car Finance

The dealership provides finance for you, i.e., you buy the car from the dealership and pay the dealership for the car. Their interest rates are higher. Dealerships don’t look at credit scores, but whether you can afford the monthly payments. This can improve your credit score, as dealers report your payment habits to the credit bureaux. This option frees you from applying for a loan with a financial institution that will more likely turn you away.

Being blacklisted does not necessarily have to impede your ability to obtain finance for your car. There are lenders who will help you and a few options for you to choose from.

Tip

• Check your credit status before applying for a loan.
• Do your research before taking out a loan.
• Compare different lenders to see which one is offering you the best deal.
• Read the terms and conditions of your contract before you sign

FACT!

• Interest rates are set out by the NCA and regulated by the NCR
• 60% per annum is the maximum interest rate allowed by the NCA

Please note that this article is for the purpose of conveying information only, and not to be regarded as advice of any kind. LoanFinder SA is not a financial institution, and do not offer financial advice. Be sure to consult your financial advisor before making any monetary decisions.

The post Blacklisted Vehicle Finance: 3 Available Options appeared first on Financial Tips and Tools for Everybody.

Debt review is the process of debt counselling where your debt is restructured in such a way that you can manage to pay all your bills. You make more affordable monthly payments to your creditors. Your basic living expenses are also considered in the restructuring.

How Does The Debt Review Process Work?

• The first step is to make an appointment with a debt counsellor who will explain what debt review is.
• You then apply for debt review by filling out a From 16 and signing it. You must provide your debt counsellor with your ID, payslip and latest statements of all your creditors.
• You may have to pay the debt counsellor an application fee (not more than the amount prescribed by the NCA).
• Your debt counsellor will notify all your creditors and the credit bureaux that you have applied for debt review.
• At this stage your creditors are not allowed to take legal action against you, nor approach you for collections for the next 60 days.
• Your creditors must supply your debt counsellor with your credit statements, outstanding balances and contracts.
• If your creditors do not provide these, your debt counsellor will assume your supplied documents to be correct (allowed as per the NCA).
• Note that credit statements cannot be included in the debt review process if your creditors had already started legal steps for payment (as outlined in section 129 of the NCA).
• Your debt counsellor will make an assessment by reviewing your income, living expenses and credit payments, and determine if you are over-indebted and whether any credit agreements are reckless.

The assessment may have the following results:

1. You are not over-indebted.
   In this case, your debt counsellor will have to reject your application for debt review, and your creditors may then proceed with legal action against you. However, you can directly apply to the Magistrate’s Court for debt restructuring.
2. You are not over-indebted but may later experience difficulty in paying your debt as per your credit agreements.
   Your debt counsellor may recommend that you and your creditors willingly agree on debt rearrangement. If the matter cannot be decided, your debt counsellor may refer it to court. The court may either reject the proposal or declare any credit agreements reckless and/or order your debt to be restructured.
3. You are over-indebted.
   Your debt counsellor will draw up a proposal for the restructuring of your debt and send it to all your creditors.
   • If the proposal isn’t accepted by all your creditors, your debt counsellor can appeal to the Magistrate’s Court to enforce the restructuring.
   • You now make an affordable monthly payment to the Payment Distribution Agency (PDA) who then distributes the amount among all your creditors.
   • After all your debt is paid, your debt counsellor will send a certificate of clearance to your creditors and the credit bureaux.

Debt Review Can Help You if:

• Your expenses exceed your income.
• You cannot pay all your bills on time.
• Creditors are hounding you for payment.

A Few Drawbacks of Debt Review

• You can no longer obtain further credit, nor can you continue using credit or store cards.
• Debt will take longer to pay off, because of the lower monthly payments.
• In some cases where you’re paying the same interest rate, interest accrued over the repayment term will also be much more.
• If you’re married in community of property, your spouse has to apply for debt review with you.
• Your debt counsellor may mismanage your financial affairs or not complete the debt review process after their fees have been paid, which could cost you money or land you in further trouble with your finances.

*Please note that this article is for the purpose of conveying information only, and not to be regarded as advice of any kind. LoanFinder SA is not a financial institution, and do not offer financial advice. Be sure to consult your financial advisor before making any monetary decisions.

The post The Debt Review Process | How It Works appeared first on Financial Tips and Tools for Everybody.

So the end of the month has reached us, and it’s time to hit the shops again to buy some groceries in order to stock up for next month. Groceries for a basic family of three can be quite expensive, and people overlook potential money savers, that can help you to shave a few bucks of the price tag.

The amount of potential savings out there, could easily amount to hundreds of rands.

What’s the Budget?

When looking at where to start saving on your next shopping trip, it’s closer to home than you think.

And by that I mean, learn to budget and how to properly do it.

One can easily save that extra R1000, because by learning not spend too heavily on goods not needed, especially on luxury goods like entertainment and big screen       TV’s,  which is a trend across the world, you are disciplining yourself to think more about how those funds could be spend where it matters.

Groceries are important for every household, but if half of your budget is dedicated to groceries, you are moving towards the red zone of debt, which is not what a   budget is supposed to achieve.

Here are several guides showing you how to budget properly:

http://www.wikihow.com/Budget-Your-Money

http://www.dummies.com/how-to/content/how-to-create-a-monthly-budget.html

A Greater Way to Save on Groceries

Below I am going to list some of the other great ways you can use, to really help save you money on your grocery shopping. Some of them may be old, but hey nothing is as good as a refresher.

Store Leaflets

Visit your nearest Game, Pick n’ Pay or Checkers collect all of their “Specials” leaflets and compare prices, to see which one of them is going to be the cheapest for you.

You can also get them online for free.

To note Game has a “price-match” policy, where if you can bring them a price of an item sold at another store, which they are also selling, and is cheaper than theirs, they will match it.

By having these leaflets on you, whilst doing shopping, can also act as a guide to exactly which items are on special that day/week, and where you will need to go in-store to find them. Also encircle the items you want to buy, to make it easier to find them. No one wants to spend the whole day in store bargain hunting.

Don’t Always Shop at the Reputable Stores

Yes in an ideal world everybody would have like to do their shopping at Woolworths, but in order to drive home the aim of saving, a store’s reputation shouldn’t be a factor.

There are lots of stores that provide brands and products that are not well-known, but are of exactly the same quality as those being sold at more well-known stores, like Pick n’ Pay’s no-name brand and Checker’s Housebrand products.

Personally I used to do my shopping in bits and pieces at Pick n’ Pay and Woolworths, but it worked out to be more expensive by at least R300.

Today by shopping at Checkers my bill now amounts to R4000, which saves me at least up to R400 and I can be rest assured that I bought good quality goods.

Just by looking at this week’s specials, you can get Country Fair drumsticks and thighs for R35.95 and a Fair Cape 2L Milk for R17.95 which if purchased at Woolworths will cost you R25.95 for their 2L Ayrshire milk and R88.34 for their Free Range roast drumstick and thighs pack.

So just by shopping at Checkers can save you in total for these 2 item approximately R60.

What about 2 for 1?

Yes you may have seen the old “buy 2 for the price of 1” or “buy 1 get 1 free” signs in shops. Immediately when I see this, I think, BUY BUY BUY.

What I am speaking about here is to buy in bulk. Many people think that they really won’t need an extra deodorant or a pair of socks.

But if you look at the bigger picture, next month or the month there after you will most probably need that deodorant, which you in essence could have gotten for “free” if you bought that “2 for 1” deal.

Or buying in bulk can also help you to stock up for the coming months, as you won’t have to buy these items again, and the money saved can then be used for something else in your budget.

*Tip: To get some great bulk deals check the back of the Checkers specials leaflet. There are lots each week.

Extreme Couponing

Well we’ve all seen the TV show and also in magazines or even online. Coupons are a plenty and if you look in the right places and collect as much as you can, you can easily get up to R50 off on a product.

Let’s be honest we always think, how is a R5 saving going to help me. But when you put 10 of those coupons together…Well then you have a R50 saving on your hands.

So couponing isn’t really about that one you get in a magazine or newspaper. It’s about collecting them, and adding them up, where it really is going to shave those bucks of the price tag.

Here are some places you can find coupons online:

http://www.couponsa.co.za/

http://www.vouchercloud.co.za/

Do You Feel Rewarded?

Most stores have a loyalty/rewards program these days, which can be used to earn rewards on certain products bought and be used to get off on your next purchase.

A rewards program of note is the Pick n’ Pay Smart Shopper card. It launched in 2011.

It works by giving you 1 point for every R1 spent. They work on an exchange rate of 1000 points to R10. So for every 1000 points you get, can get you R10 back on your purchases.

So for example if I budget R48000 on groceries for the year, and convert it into Smart Shopper points, that will bring my points total to 48 000 points, and converting that into rand value, brings me to R4800 in savings.

That is not too bad. So consider signing up for a loyalty/reward program on your next shopping trip.

*To note if you are a Discovery member, Smart Shopper ties in with HealthyShopper, leading to even more savings.

Conclusion

So as you can see there is various ways so save the next time you go to buy some groceries. And with that I hope your next shopping trip is very frugal one.

The post How To Save Money On Groceries appeared first on Financial Tips and Tools for Everybody.

Let’s face it, these days everywhere your gaze fell, whether it’s in a retail chain store, bank or petrol station, there will be some form of a rewards or incentive program.

They are widely advertised as a way to save money on your next purchase or getting cash back on your purchase. All that you have to do is, buy allot of stuff, get some points, and maybe you’ll have enough that you’ll be able to use to get some bucks of your next purchase.

And here is my problem with them; you will literally have to shop till you drop, to even remotely get enough points to buy something decent with it.

That, and there is way too many of these rewards programs, which tend to sometimes overwhelm people and even get people to question them, asking if they really need them. Hell in the last year or two there has been UCount Rewards from Standard Bank and ThankU points from Edcon stores.

Now before we get into my experience of using them, let’s look at some quick facts on UCount Rewards and the ThankU points program from the Edcon group:

UCount – Standard Bank:

Benefits:

• Earn points using all your credit, debit or cheque card as well as when throwing in fuel or buying groceries at selected partners.
• Maximum save on spend is 1.5% at the highest tier.
• Exclusive partners provide a higher point accumulation, which includes Clicks, Incredible Connection, Makro and Tiger Wheel & Tyre. These provide a 5% in rewards points collected on spend.
• You can earn up to 10% back on your grocery shopping from Woolworths, Checkers, PicknPay and Spar.
• Receive R1 in points for every liter of fuel thrown into your tank at your nearest Caltex petrol station.

Cost:

R20 p/m with other bank charges.

ThankU – Edgars & Edcon stores

Points Collection:

• Points are collected on 10 points per rand spend (10 pts = R1 spend) and 1000 points is equal to a rand spend. So it’s 1% back on R1 spend.
• If you’re an account holder, you get an extra 5 points on every R1 spend (15pts = R1 spend), equal to 1.5% back on R1 spend.
• Only spend 10 000 points at a time. (R10)
• If you spend R1000 across participating stores, you can get R10 or R15 back in points of you are an account holder.
• Points expire after 36 months.
• Gift cards, financial services products, payments or 3^rd party payments like utility bills, do not qualify to earn points.

Cost:

No paid subscription. Get 2 card types, one for account holders and one for non-account holders.

Account holders can use theirs, when making payments on their Edgards or any other Edcon group shop card.

Non-account holders use their when making cash purchases, also either at Edgars or an Edcon store.

Is it worth it? Will it save you money?

Looking at the above, points collected will not really help tighten your budget.

In actual fact, you will have to spend more to get anything back, unless you are very patient and are willing to wait a couple of years before you will be able to buy that dress or jeans with points collected.

So In my experience this isn’t really going to save you money.

Let’s take a real-world example, using UCounts Rewards:

If we were to buy a pair of jeans for R600 at Edgars as a non-account holder, we would only get back 6000 points and 9000 points if you are an account holder.

6000 points = R6 approx. and 9000 points = R9 approx.

So that doesn’t really amount to much, and you won’t be able to really do anything with it, as you need 10 000 points first, before you can use it. And that only gives you R10 back on your purchase.

So to get at least get 50% back on the purchase of a pair of these jeans, you will at least need to have 3000000 points, which means you will have to buy at least 30 000 pair of jeans to get it.

This strengthens my point more, that rewards programs can sometimes come across as misleading.

Hell a regular customer should be rewarded all the time, just because he spends lots of money in your store, never the guy who spends the most on a good day.

Getting More Rewards Faster

There is however ways of speeding up your quest to get more points with some rewards programs, for example with ThankU points, you get extra points when Edgards have in-store promotions giving double or triple points, purchasing airtime, the paying of club fees and 3^rd party payments.

My Personal Experience

I was totally bummed when I bought something the other day at CNA with my ThankU card, worth almost R7000 and low and behold it only gave me 70000 points, amounting to R70.

Now I ask you with my sad blue eyes, what can you buy at Edgars for R70 today, which is decent?

I rest my case.

Conclusion

Although these rewards programs, doesn’t really give you allot of points, it sometimes does make you wonder what all the fuss is about. But the small amount that is does give you back in rewards can be used as a last resort for that odd R20 or R50 you may need to add, to save on something you really NEED to buy.

The post Opinion: Do Rewards Programs Really Help U Save? appeared first on Financial Tips and Tools for Everybody.