Vouchers and offers save shoppers £742 a year
Shopping vouchers, 'buy one get one free' style offers, credit card rewards and restaurant deals now account for £1 in every £25 spent, according to new research.
Vouchers and offers save each shopper £742 a year on average and as Brits look to cut the cost of their everyday spending, nine out of 10 people are collecting/redeeming rewards on a monthly basis, according to American Express and the Centre for Economics and Business Research.
The amount consumers spend on rewards, vouchers and offers is predicted to reach £38.5 billion by the end of this year, with credit card reward points in particular being used to balance household finances.
The research found that 11% people use vouchers and rewards as their rainy day funds rather than keeping hard cash in reserve for when times get tough, while 17% rely on credit card reward points for 'incidental and unexpected expenditure'.
Heather Laverne of American Express, said: "It's fair to say rewards and special offers have grown in popularity during the economic downturn but they are now very much part of our everyday shopping experience, helping consumers budget and better manage their finances."
American Express also reveals the amount we spend on enjoying ourselves has changed drastically in the past 50 years. Today, we spend £70 a week on recreation and culture and £65 in restaurants and hotels, compared to £22 and £27 in 1963 (in today's prices).
Used by the holder to buy goods and services, credit cards also have a monthly or annual spending limit, which may be raised or lowered depending on the creditworthiness of the cardholder. But unlike charge cards, borrowers aren’t forced to pay the balance off in full every month and, as long as they make a stated minimum payment, can carry a balance from one month to the next, generating compound interest. As the issuing company is effectively giving you a short-term loan, most credit cards have variable and relatively high interest rates. Allowing the interest to compound for too long may result in dire financial straits.