Are reward programs right for you?
Tuesday April 22, 2008
Reward programs can easily increase your spending power, but they can also be a temptation to increase your spending. Depending on your spending habits, you may want to analyse whether you will benefit from reward programs before you switch credit cards.
If you already spend more than you can afford on a frequent basis, then reward programs will likely cause you to do this more often. It can be easy to justify overspending with the offset of reward points, but as these can usually be spent only on luxury items and services this is something of a delusion.
If you are sensible with your credit card spending and only use it as a more convenient means of payment, then reward programs are perfect for you. You'll pay more in fees than for other credit cards and the rates will be higher, but the interest free days should allow you to avoid interest if you are clever. By merely doing your usual spending with a reward programs credit card rather than cash, you can earn reward points that can extend your financial ability. It really is that simple, but relies on being disciplined in repayments and not overspending.
Please visit our comparison page for a great choice of credit cards with reward programs.
