06.25.08
Using Credit Card Rewards to Your Advantage
Rewards are an “in” thing nowadays. People talk about their credit cards and compare features including the pay-off system offered by their products. On the other hand, credit card issuers are competing against one another through finding the best reward system to offer in the market. To a credit card issuer, the reward system is merely a marketing strategy to increase a company’s profits. rewards are offered to attract more people and increase consumer base, eventually increasing sales and revenues. On the part of the consumer, a reward such as this case could either mean an advantage or a disadvantage.
Therefore, it is important for any consumer to weigh the consequences fist before searching for the best cash rebate credit cards. Finding the best may be tricky, as different issuers have different mechanics and models for implementing it. The impacts of the reward system to consumer may vary, depending on the necessity of the person and how he or she consciously responds to such incentive. It can be carried out actively or passively. For the active part, some people are really making efforts to maximize their rewards by increasing their credit card purchases. As a result, they make unnecessary spending on things, which can actually be set-aside for the moment. Increasing purchases will consequently increase the need to repay your credit transactions, thus adding weight on the liability on your part.
For some users, it will not only end in having high credit bills but also in facing deep financial crisis. A cash reward credit card, if misused, will only bring disaster to one’s life. Huge debts will pull you down and may only cause you to avail of other debts in order to repay existing ones. And after all, one will only realize that the rewards can never compensate for the financial instability and crisis that he or she is being confronted with at the moment for overlooking the possible impacts of such incentive. Active participation is good, but is not encouraged especially if you are not really a frequent user.
In addition, you will develop the habit of making several purchases at a time. It may turn you to being obsessive-compulsive. For the passive component, one can accumulate points or scores without having to be consciously aiming at a target date and volume. What one has to do is simply make the necessary purchases without looking forward for any reward. Remember, you have availed of the credit card to bridge the gap between your actual income and your actual expenses, and not necessarily because of the rewards that await you.
Even the best cash rewards credit card cannot make much difference if all other features cannot compete with other products in terms of interest payments and penalty charges and fees. With this approach, one needs not to be worried of the probability of having unnecessary spending and unreasonably increasing one’s expenses, as well as financial liabilities. Maximizing rewards is a good point, but it is simply safe to drop the idea if it only exposes you to greater risks of having huge debts.
One has to make a sound priority list of what needs to come first, and rewards should not be a major consideration. Getting rewards do not hurt, it’s true. In fact, it is a good and a rewarding undertaking. But if one takes advantage too much to the point of being careless, it cannot be a good point, though. So when is it the best time to go after rewards? There is no answer for that.
No one should be manipulated by such a marketing strategy, which is almost always exclusively favorable for the credit card issuer. A cash back rewards credit card is meant to provide incentive to frequent users and not to put people on deep financial trouble. So as a preventive measure, such an incentive program should not be taken and participated of actively.
Rewards are great and they come for free. And the degree to which it can serve anyone would depend on one’s capacity to comprehend its purpose and how it is going to affect one’s life. And cliché as it sounds, discipline is still the most important thing. If there is anything that needs to be reinforced or be taken actively and seriously, it is self-control.
In this world of materialism and consumerism, people should make conscious efforts in avoiding fads and promotions that will only take advantage of one’s weakness. Getting the best cash reward credit cards does not hurt, it can even be indeed rewarding. But putting it into use requires one’s effort not to bring it beyond his or her limit.
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