Credit Card Companies Luring People Into Debt With Promise of Rewards
The following is a guest post
The ads and TV spots are everywhere and the Internet has been inundated with their taglines. Credit card rewards programs have been around in one way or another for a while now but it hasn’t been until lately that they’ve been going after consumers with such gusto. If you’re online shopping or browsing for anything from emerald rings to the latest job statistics, you’ll see these programs that insist that they’re too good to pass up but the question remains: After years of these programs being around, are they really worth it?
In every situation you see one of these ads or spots, these programs are presented as a money saving device. This is nothing but a continuation of an already bad idea. The idea is that somehow, by putting yourself in debt, you can save or make money. This is one of the prime reasons so many people got into trouble with their mortgage and credit a few years ago. They let their balances and payments get way out of control because they didn’t realize the repercussions of having so much debt. Eventually, you have to pay it back and at some point, if you keep spending, you’re interest payments will far outweigh your initial cost.
One of the biggest misconceptions currently in practice is the idea that there are amazing advantages of using your credit card to get travel rewards and cash back offers. This is a ridiculous concept. Charging purchases that incur interest rates with the intent of receiving money is questionable at best. The only thing that paying money to make money will add up to is huge debt. People want to take advantage of travel miles and rewards but at what cost? In business, you may have to spend money to make money but that doesn’t translate into real life. Putting yourself deeper and deeper into debt in order to receive nominal benefits just isn’t worth it. If you’re one of those few people who can pay off your balance each month then it might be worth it but most people don’t do this.
Having the freedom from cash has a lot of allure. It does make it easier getting by but you don’t need a credit card to do this. Consider using a debit card. It doest the same thing and many banks offer it as a part of having a savings or checking account with them. This is a hassle free way of using a card that immediately withdraws the money from an account with no additional charges. It will also keep you from overspending and racking up huge debt balances. Keep better track of your finances and live within your means by using one of these debit cars that most banks now offer as a gratis service.
Using balance transfers with zero APR sounds great and people save tons of money doing so but if you can’t pay of the debt amount before the zero APR rate expires then you’ll end up getting hit with massive rate hikes that make the whole process pointless. If you’ve transferred your balance to one of these accounts then don’t use your card. You have to pay off that amount in time or it’s going to cost you big time in the long run.
It doesn’t matter what your age is or credit history, don’t be fooled by these programs. If you’re well off enough to pay off your purchases and balances each month then maybe a credit card with travel miles or gas rewards is good. Just don’t allow yourself to go into debt for the sake of any nominal benefits. Credit card companies have been very aggressive at producing convincing campaigns touting the different rewards and benefits of swiping. It’s ultimately up to the average consumer to education themselves on these campaigns of misinformation.