Five Questions About: Reward schemes

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Are there some new reward schemes?

There sure are, as this week's Money Insider (p65) explains. The banks have moved in response to seven-day switching in the hope their offers will attract customers – and that the rewards and cashbacks will persuade them to stay.

Who has launched schemes?

Banking giants such as Halifax, Santander and NatWest have all rolled out cashback products, while Lloyds is expected to launch a new one soon.

But aren't there already lots out there?

There are. You may recall Nectar, which is taking on the banks' challenge by launching October double-points deals at Sainsbury's, eBay and Homebase, as well as bonus points through Hertz, Expedia and Oxfam.

But don't you need lots of points?

Cashback site Quidco says you need to spend £5,000 to get enough points for a £50 toaster, Quidco published research this week suggesting people prefer cashbacks rather than rewards.

Why would that be?

Because you can actually get savings on shopping rather than having to keep spending before being rewarded. The best schemes pay you for shopping, not reward you for overspending.