Most economists highly suggest spending through cash or prepaid debit cards instead of credit cards in times of crisis or recession. But how can you stop yourself from using your credit cards, especially if they are offering lucrative rewards like zero percent interest rates?
Well, before you sign up for your next credit card application, it is best that you assess the different credit card rewards. The rebates and credit card rewards promised by your favorite company might be nothing but plain marketing schemes.
Here’s how most of the credit card rewards programs work:
1. Credit card application.
Some credit card companies have processing systems that automatically enroll you in their rewards programs, while others require certain procedures and payments before you are enrolled in their rewards program.
The best thing you can do is compare the payments, procedures, and points from different credit card rewards programs. Pick out which is best for you and enroll in that.
Points generated through using various credit cards rewards programs have their monetary values too. For example, 10,000 points may be equivalent to $3. Make the numbers work, and comparing will surely be easier.
It will be better also to enroll in one credit card only. This way, you only have one credit card to worry about, though you may be limited in your shopping options.
2. Shop using a rewards card.
The reason why credit card companies offer rewards programs is to encourage spending. Through spending, the credit card companies and retail stores can generate more income. In return, you will be given points.
Therefore, the more you spend, the more points you can have. But don’t make this an excuse for overspending. The rule of thumb here is to use your rewards card whenever needed and possible.
3. Redeeming your rewards.
These rewards vary from free miles to discounted flights, trips, holidays, special gifts, bigger discounts, and cash or balance rebates. But before you can get these rewards, you have to accumulate certain points first. These numbers should work for your advantage.
Credit card companies profit on this scheme by charging consumers and merchants interest. That is why retail stores participating in credit card rewards programs charge higher on their products and processing.
Many critics of credit card rewards programs say that the points are actually useless because of the interest rates, annual fees, and the higher price of special stores where the credit cards are accepted.
But there are a few credit card companies that can genuinely give you fruitful rewards for your loyalty. These are commonly credit cards with zero percent interest rates and that allow shopping in thrift stores.
More than the rewards, credit cards also offer convenience and shopping security. Credit card use is convenient because you don’t have to carry a lot of cash when shopping, and it is secured because you can always trace how your credit card was used.
These many benefits are enough reason for you to begin processing your credit card application. The rewards are only added services for this already convenient and secure paying scheme. Prepaid debit cards and cash can always be your next best option if credit cards and their rewards won’t work for your advantage.
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