Credit card rewards…
Got an email from friend this week which went something like this…”Just got a mail from Nedbank to say I have 300 000 odd ‘Greenbacks’, their loyalty programme. I can exchange them for until trust investments. Wanted to know your opinion? I’ll have to put R5000 cash to open an account but can get around R11 000 or so more through the Greenbacks I got sitting in an account.”
What a great idea…I knew you could get shopping vouchers but had no idea you could get unit trusts as well, so I did a bit of research.
It turns out that through the “Greenbacks” scheme you can in fact exchange the rewards for unit trusts. The question is, would I rather have unit trusts or vouchers for Cavendish Square? And this is where Nedbank have been “clever”.
If you convert the Greenbacks to shopping vouchers you will get R100 for each 3500 Greenbacks – so for my friend, this would mean about R8500 worth of vouchers (a lot of retail therapy indeed). If, however, you invest in their unit trusts they will give you R100 for each 2800 Greenbacks – so he would get about R10700 which could be invested. He would be better off by R2200 by investing in the unit trusts – and it will be done at no initial fees – so it becomes very attractive indeed.
So would I do it? Absolutely! If I had Greenbacks “lying around” that I had accumulated through using my credit card with no “need” for vouchers then I think that this is a very attractive option indeed.
Taken from their website… Invest in unit trusts.
2 800 Greenbacks = R100 contribution
Invest in a Nedbank unit trust of your choice and pay 0% initial fee on your invested amount (save up to 5%)
- Minimum contribution of R5 000 to open a new unit trust account.
- Contribute in multiples of R100 (2 800 Greenbacks).
- A minimum of 140,000 Greenbacks points is required to invest in unit trusts.
And I guess if he really needed the cash, he could put the money into the Money market fund and redeem it shortly thereafter (but I am sure that is against the spirit of this and that there could well be some fine print somewhere to limit this).