March 17, 2009
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Guidelines to the CC Fine Print, Pt.2
Secure your rewards.Rewards Points: These can be a big draw and reason to use your credit card frequently, but don't be sucked in. Like ‘promos', these are also, designed to make money for the credit card lender at your expense. Most of them are not designed to ‘rip you off", however. They are designed to encourage you to use your credit card more often. This is good, also. Not to be shied away, just be a little vigilant, here.
- At the Start: Many of the programs offer their best rewards at startup. Boom, your very first credit card purchase nets you $25. Boom, making at least one credit card purchase each month nets you $10. This can go on for the first 6 months.
- Cash Back: Marketing schemes like to use the word "Cash" somewhere in the title or slogan for credit card rewards. Many times though, this doesn't really mean spend-able cash. It means you have to shop with one of their affiliated ‘partners' who simply charge more and they offer a rewards points discount, bringing you back to what you would have paid at market price elsewhere. So, you break even...what's the point? Most people are better off just concentrating on real cash back rewards.
- Spending Structure: Today, the new trend is to reward certain categories. These categories can be based the amount you charge on the credit card in a time frame or else the category of goods you purchase, based on the credit card industry's ‘MCC' (merchant category code) designations. These are things like groceries and gas.
- Notify: A few of the offers don't inform you explicitly but, even though the rewards are due to you, you still have to notify your credit card lender that you want to receive them. If you don't, you simply won't receive them.
- Expiration: Only a few credit card lenders let accumulated points go on forever. There are so many pitfalls here, it's probably safer to just call Customer Service and have it all explained to you.