Spending more to obtain credit card rewards is one of the worst financial strategies that consumers could possibly follow. Spending more usually means that you do not have the cash to pay the credit card when the credit card statement arrives. If you cannot repay the balance by the due date, consumers are charged anywhere from 15% to 30% interest depending on the card that is being used. Any savings in terms of sales or rewards will quickly be used up in interest charges. Sure you have your reward, but it would have been cheaper to not buy the item at all and purchase the reward itself instead of trying to obtain enough points to gain the reward.
Spending more to obtain Credit Card Rewards – The Right Way
Credit card rewards can be worthwhile provided you only purchase the things you need, always charge your purchases to the credit card and always pay the balance in full on the due date. Once you need to pay interest, you have lost any savings from the original purchase and perhaps your item will even cost more than the full price due to the interest charges. The Credit card companies are counting on you to miss your payment so they can begin billing interest charges. In addition to collecting a commission on every sale from the store owner, they make billions from consumers by charging interest on overdue accounts.
Credit card rewards can be very lucrative, especially if they save you money for something that you would do anyway. For example a card that provides rewards for travel to places you were planning to go anyway can be a good deal. If the rewards cannot be used for something that you like and enjoy, cancel the card and get one that does meet your needs.
Be patient the rewards will build over time and save you money in the long run if used in the proper way. Whatever you do, avoid spending more to obtain credit card rewards!