Reward points bonanza? Not quite for cross-border shoppers

TORONTO -- The low loonie hasn't been kind to Canadians. Groceries cost more, unemployment is creeping up and domestic investments are underperforming.

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But amid all the bad news, credit card rewards collectors can take some relief in earning more points than before when spending money or shopping in the U.S., even though it isn't exactly the perfect time to go on a cross-border shopping spree in a bid to horde extra points.

"In the long run ... you're making less in points than you were before because you're spending a lot more cash up front," said Patrick Sojka, founder of Rewards Canada.

The Canadian dollar dipped below 70 cents US last week and is hovering just under 69 cents this week.

Canadians purchasing U.S. goods online or across the border now pay a roughly 30 per cent premium. But they're also earning 30 per cent more points when paying with a credit card that offers rewards based on total dollars spent.

So if a product cost US$100 when the two currencies were close to being on par, Canadian shoppers earned roughly 100 points, depending on their card's policy. Now that product earns Canadians roughly 135 points, said Sojka.

Another apparent bonus? Canadians need to spend less in the U.S. than Americans to earn the same number of points, said Avery Campbell, the founder of Awarding Canada, a business that helps Canadians make the most of their travel rewards.

Assuming both nationalities use the same credit card that offers one point per dollar spent, Americans need to buy something worth US$100 to earn 100 points, he said, while Canadians can earn the same amount on a roughly US$70 bill.

While those things may seem good at first glance, the extra points aren't exactly a steal.

"It is worse because you are spending more money," said Campbell. "Your purchasing power is lower."

Canadians have to spend more money on items that once cost them less to earn those extra points, Sojka said.

While that is true, they may be able to book flights with fewer points than normally required thanks to the low loonie.

As purse strings tighten, Canadians seem loathe to travel as much as usual, said Sojka, especially to the U.S.

That makes Aeroplan's market fares, which are based on real-time flight prices, a deal on certain routes.

He recently tried to book a trip for four from Calgary to Hawaii, which typically requires 180,000 miles in economy, according to the company's fixed mileage rewards chart. He snagged the flights for 9,000 miles less through the market fare option.

"That's where Canadian points will become a greater value is on these sort of flights."



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