My husband and I have a few credit cards and a joint debit card account.
All have some type of “rewards” program.
Our debit card rewards program gives us points for every dollar spent, and I think more points if we use it at certain types of stores. Recently, we earned enough points to get a $50 gift card to a restaurant.
The gift card arrived in the mail the other day, and we plan to use it soon. We’ll spend all $50 on the two of us–drinks that aren’t water, an appetizer, two entrees, and dessert. We never do that, and if we didn’t have that gift card, we’d be getting much less.
One credit card that I plan to close this summer gave us enough points to get a $25 Amazon gift certificate. I expect to get that within a month or two, and put it toward buying a wedding gift for my sister-in-law, if at all possible.
The credit card that we plan to keep gives us cash back rewards. We’ve gotten a few hundred back to date.
It’s nice to get those rewards, but I’m wondering: Can the idea of getting rewards help you spend money where you shouldn’t?
I’d say this is really possible.
Credit card companies wouldn’t offer an incentive program if they wouldn’t be making gobs of money off of it.
A consumer might make a purchase, knowing they’ll earn “points” or whatever, even if they really don’t need the item. Or worse, they’ll only make minimum payments on the account.
The above scenario is a terrible use of a card incentive program.
On the other hand, if you’re responsible with your plastic, rewards programs can actually be rewarding.
For instance, if you really and truly were going to spend a certain amount of money on something anyway, you might as well get a little something back for it, right?
A few weeks ago, I called to close my credit card account linked to the Amazon program. The lady on the other end of the phone effectively talked me out of it. She said that I only needed 200 more points to get the reward. Further, she said if I made four transactions with it this month, I’d get an extra $10 gift certificate. I thought about it, and remembered that we’d be buying plane tickets soon–enough money to give us the remaining points.
It was worthwhile for me to keep the card open a little longer so I could get this reward. We aren’t taking out a mortgage any time soon, so it shouldn’t have a negative impact on my credit score.
Cash back incentives and gift cards and such can be an incentive to stick with a bank or credit card company.
If you do a rewards program right, you won’t lose money in the process.
What do you think about rewards programs? Do you use any?