Credit Card
Rewards
It is a fine line between what is smart and what isn’t
sometimes. Sometimes you think that you are doing the smart
thing, but quite often you aren’t. When it comes to credit
cards, this line can get a little blurry if you aren’t careful
with your money.
Many times people take on a credit card because of the points
that they can accumulate through their rewards program. They are
excited about the amount of money that they are basically making
off of spending, and so it seems that they are truly getting
something for nothing. Now, think about all the things that a
credit card represents – do you really think that you are going
to get something for nothing? Probably not – that is why you
have to be careful with who you go with.
Credit card companies make money off of you borrowing against
them for purchases. If you pay your balance in full every month
and do not pay interest on the card, and if there is no annual
fee for the program or the card itself, then yes – you are
getting something for nothing. The credit card companies make
their money off of the companies that you spend money at because
they pay them a fee in order to be able to offer you the ability
to use your card. You also have to make sure that there are no
fees involved in you cashing in your points, for some credit
card companies make their money that way as well.
But most credit cards charge an annual fee either for the card
or the program, or in some cases – both. American Express
charges you an annual fee to hold their card, and a fee for
every card member. Then if you want to get points, you have to
pay an additional Membership Rewards fee. This is in addition to
the interest that they are making off of you and your purchases
if you don’t pay them on time each month.
There are some credit card companies out there that will give
you all of this for free as long as you pay your monthly balance
– or you will simply be paying for it with your interest. Just
be careful about who you use and how you want to go about
getting your rewards.
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