Collect points to pay down your mortgage

By Romana King on June 1, 2011
Estimated reading time: 1 minute

Financial rewards aren't new, but a credit card from RBC lets you redeem points to pay down debt, such as your mortgage, or contribute to your retirement.

My husband and I are on the three-year dream vacation plan. The one where you pay for everything using credit cards that collects rewards points and eventually collect enough points to take that vacation. According to a new Ipsos-Reid/RBC poll, we’re not the only ones using points for travel. According to the poll: six out of 10 premium reward card holders had redeemed points for flights in the past three years; 30% of reward earners opted for merchandise, while under a third (27%) redeemed for gift cards/certificates. But what’s really interesting is that almost two-thirds (62%) of point collecting Canadians are interested in financial rewards. Bank-sponsored financial awards from aren’t new. More than a decade ago Bank of Montreal offered points to first-time homebuyers, who could redeem these points when they took out their first mortgage. (Too bad the bank didn’t offer me the best rate when I bought my house — I’d collected close to points equivalent to $1,500!) Now RBC has come out with a credit card that works a lot like travel reward points, only you can redeem your financial rewards for vouchers to pay down your mortgage, your line of credit, your personal loan or for investment purposes (such as RRSP contributions). As far as I am aware, only RBC is offering redeemable financial rewards: with a minimum redemption of 12,000 points you get a $100 voucher. (But you’ll need to spend $12,000 to get those 12,000 points). Still, rather than saving up points for a vacation, you could put your spending habits towards paying off debt or saving for retirement.