Thursday, September 30, 2010

Avoid Reward Cards

Everyone is looking for a way to make a couple extra dollars. Your credit card companies know that and they are willing to help if you are willing to pay the price. How many times a day do you get offers from credit cards and debit cards offering you cards that get you rewards points? How many times a day do you see an offer where if you purchase pool supplies once you will get rewarded with 100 extra points or more? You see these a lot because credit card companies are smart and it’s time you got smart too.

First off, these points don’t benefit you nearly as much as the credit card companies. There hope is that you purchase thousands a month and only pay off hundreds, keep paying the minimum and they can keep racking up interest. They figure in the end to offer you a point per dollar spent is nothing when they are getting thousands off of you in the course of your time with the card. If they didn’t make interest off the card or if everyone was paying on time, they wouldn’t offer these promotions.

The only way to successfully navigate these offers is to do it with a debit card. There you know every dollar you spend is a dollar you can afford to spend. It comes right out of your bank account. Don’t worry about the miles, the travel points or the free gift cards. Take the time not to be caught up in your credit card hassles and use the interest you are saving and put that into a bank account and let it grow. Those credit card companies are giving you 1% back on all purchases and charging you at least 9%. Save 9% of your money and see how much you have in a year. It will buy you a better vacation.