Customers increasingly use rewards points to help manage cost of living.

Kiwi consumers are taking advantage of card rewards schemes to manage ongoing cost of living pressures, with a big rise in rewards being spent on essential purchases like groceries and fuel as Christmas approaches.

With the often financially-stressful summer holiday period looming, Westpac NZ data shows customers have redeemed more than $11m of hotpoints Pay rewards in the last 12 months – a 140% increase on the same period last year.

Westpac’s hotpoints Pay is currently the only bank card rewards scheme that lets customers spend their points in real time, like cash, on anything they want. Customers can redeem points on any purchase anywhere Mastercard is accepted, by turning on hotpoints Pay in their Westpac One online banking app and then using their physical or digital card.

Redemption rates of hotpoints Pay have more than tripled for fuel purchases and risen 150% for groceries year-on-year. Redemption rates on “discretionary” purchases have risen but by much less – about 75% for travel and electronics and 40% for household appliances.

Westpac NZ General Manager of Product, Sustainability and Marketing, Sarah Hearn says using rewards points could be one way for people to help keep costs down, if they’re worried about Christmas and summer holiday spending.

“Increasingly, we’re seeing our customers use the flexibility of hotpoints Pay to help keep everyday costs down, rather than saving them up for more traditional big-ticket items like appliances or homeware,” Ms Hearn says.

“The percentage of total points our customers have used for non-discretionary spending like groceries has risen from 35% a year ago to nearly 42% today, with the proportion spent on discretionary items falling to 58%, and the gap continues to close.

“That squares with other data that shows Kiwis are being more disciplined with their finances and looking for ways to save money as living costs have risen.

“More than 9,500 customers have used hotpoints Pay since it was launched in Westpac One® digital banking in April, including more than 1,500 new users.  Previously, it was only available through the hotpoints website.

“We’ve designed hotpoints Pay to be as flexible as possible, so customers can save money on purchases every day, rather than just occasional big-ticket items.”

This week the bank released a survey showing nearly three-quarters of customers are moderately or very concerned about the cost of living.

“Retail spending has been increasing slowly over the last three months, but we know many families will still be feeling the pinch as the holiday season approaches,” Ms Hearn says.

“For our credit card customers, redeeming hotpoints is one way to help manage pre-Christmas cost pressures. But if anyone is concerned about making ends meet over the summer, we encourage them to contact us as soon as they can, to see how we can help.”