Rewards Credit Cards?

[AIT]

We have a Upromise credit card. It's linked to a Upromise account that puts money into a 529 account for educational spending. The card puts 1% of all spending into the Upromise account, and if the merchant is affiliated with Upromise, they'll add a percent of the transaction to the Upromise account too (usually 1%-3%, but I've seen as high as 25%). Most of the affiliated merchants are online, but there are a lot of restaurants and a few brick and mortar stores like Bed Bath & Beyond. There are more generous reward cards out there, but this one is decent and it makes saving for college easy.

[Transient]

I use the Cabela's cc when I need one. I thinks its one point for one buck on anything you can buy with a cc. Haven t put a lot of deep thought into how far ahead it will actually get me unless I start a lot of outdoorsy stuff. LOL.

[MrGreg]

Like others, I have a Chase Freedom. 1%-3% back, and $50 bonus once you reach $200 rewards.

[LindenCy]

Has anyone noticed that the grace period on cards is getting shorter and shorter? I know you can pay online, but if you want to mail a check, you almost have to get it out right when the bill comes or you will get screwed.

[Phaedrus]

It's even cooler when they fail to credit your account for a couple weeks, and forcing you to accrue a service charge.

And how about when they jack your interest rate up to 30 percent, because they "think" you have too much debt load and "might" be late or miss a payment. That is soooo cool.

Credit cards ROCK!!!! I love spending $100 in fees to "save" $10 in Rewards money....

[CYdTracked]

I realize that this won't be a popular opinion... But please realize that utilizing cards of these nature are making your everyday purchase more and more expensive.

Check out this site:
Unfair Credit Card Fees

Just a small excerpt from the site:
So you may seem like you are getting something for nothing, you aren't. We are all paying for your first class trips, your digital cameras, and your cash back.

I'm surprised someone hasn't torn you up about this yet actually. What about ATM fees, aren't they a scam too? We wind up paying for about anything these days one way or another, if credit cards were such a pain stores wouldn't accept them. Plus there are plenty of fools that keep balances on them and keep the business thriving by paying outrageous interest rates on the balance. If we all paid off our balances each month credit cards would probably not exist.

[superdorf]

I'm surprised someone hasn't torn you up about this yet actually. What about ATM fees, aren't they a scam too? We wind up paying for about anything these days one way or another, if credit cards were such a pain stores wouldn't accept them. Plus there are plenty of fools that keep balances on them and keep the business thriving by paying outrageous interest rates on the balance. If we all paid off our balances each month credit cards would probably not exist.

I'm sorry to say this but you are absolutely wrong. You pay the ATM fees directly yourself when you take money out of your account. Also, many banks don't charge when you use their ATM machines.

Retailers don't have a choice in the matter. Would you still shop at Target/Wal-Mart/Hy-Vee if the didn't accept credit cards? Visa/Mastercard have the retailers right where they want them, and they spend MILLIONS marketing cards to the consumer.

Credit card fees charged to merchants are basically an entire second business to Mastercard/VISA. My guess is that this is now the "bread and butter" of their operation. You, me, and everyone else indirectly pays these fees in higher prices at the grocery, store, gas pump, and anywhere else credit cards are accepted.

If you follow the link from my original post you will find more information. On some card transactions up to $2 per $100 spent goes directly to Visa/Mastercard.

I guess the bottom line is that if you think you are getting something for nothing... You aren't.

[247cy]

Maybe I'm old, but I tend to pay for everything with cash. I like going to the bank and asking the teller for cash from my account. I find that the money is harder to spend when you actually have to hand it over to someone. I use plastic occasionally for online purchases and to rent a car or book a hotel room, but other than that I try to stick to the paper.

[Phaedrus]

Maybe I'm old, but I tend to pay for everything with cash. I like going to the bank and asking the teller for cash from my account. I find that the money is harder to spend when you actually have to hand it over to someone. I use plastic occasionally for online purchases and to rent a car or book a hotel room, but other than that I try to stick to the paper.

And consumer studies prove you out. The average consumer spends something like 15-20% more per transaction when purchasing with a credit card.

Cash is best, debit card is next best, imo.

Here's a link to an interesting article about "Rewards" programs.

Raw Deal: Rewards programs are really a rip off - Jun. 2, 2008

Bottom line: Credit cards wouldn't use them if they didn't make them money.

[ISUAlum2002]

I'm sorry to say this but you are absolutely wrong. You pay the ATM fees directly yourself when you take money out of your account. Also, many banks don't charge when you use their ATM machines.

Please. You don't think that retailers have built in the small percentages of fees that they pay to the card companies into the retail prices that they set on their products? Think of it as a tax on the retailers. And as we all know, businesses don't pay taxes, their customers do.

If the situation truly was as dire as the article you posted makes it out to be, then yes, retailers would stop accepting the cards. I still see plenty of old timers asking what the date is so they can write out a check and then digging around in their coin purse for exact change.

This is pretty much the one area where those of us who are financially responsible get to take advantage of those who are not, as they are the ones who finance our rewards by paying the ludicrous interest charges.

[Phaedrus]

This is pretty much the one area where those of us who are financially responsible get to take advantage of those who are not, as they are the ones who finance our rewards by paying the ludicrous interest charges.

There would be the lottery, too....

Taxes on the stupid are fun...

[superdorf]

Please. You don't think that retailers have built in the small percentages of fees that they pay to the card companies into the retail prices that they set on their products? Think of it as a tax on the retailers. And as we all know, businesses don't pay taxes, their customers do.

I think you miss my point... In a grocery environment this fee almost completely erodes your profit.

And yes, the retailers are absolutely passing this cost on, but it is charged to everyone.

Let me ask the group this question, if the fee was passed DIRECTLY on to you would you still use your card.

For example, you go to Target/Hy-Vee and buy $150 worth of just groceries. You swipe your "Chase Freedom" or equivalent, and the card reader says:

This card requires a fee of $1.25 to be used on this transaction, Yes/No

Would you still use the card? If things don't change this is the direction I see retailers heading.

[ISUFan22]

I realize that this won't be a popular opinion... But please realize that utilizing cards of these nature are making your everyday purchase more and more expensive.

Check out this site:
Unfair Credit Card Fees

Just a small excerpt from the site:
So you may seem like you are getting something for nothing, you aren't. We are all paying for your first class trips, your digital cameras, and your cash back.

I am aware - yet, it's not going to stop anytime soon. I'll take advantage of the rewards.

It's a scam. Keep the debit card; you'll end up spending 15-20 percent more using the credit card to get that 1% cash back.

It's even cooler when they fail to credit your account for a couple weeks, and forcing you to accrue a service charge.

And how about when they jack your interest rate up to 30 percent, because they "think" you have too much debt load and "might" be late or miss a payment. That is soooo cool.

Credit cards ROCK!!!! I love spending $100 in fees to "save" $10 in Rewards money....

How is it a scam? As long as I pay off the balance each month, the CC company gets zero money from me.

[superdorf]

How is it a scam? As long as I pay off the balance each month, the CC company gets zero money from me.

You pay more for everything you buy... But it won't stop until retailers/consumers do something to stop it... So in the meantime... charge away!

[keepngoal]

I think you are way off base and have a real personal feeling attached to this.

Some places have cash discounts ... great! use cash.

Most places have the same price no matter how you pay ... great! Use your personal freedom and be responsible with your choice.

What I am hearing from you is that you are upset that you pay the same amount for products or services with cash as those that use CC's while part of the margin in those products or services goes to a third party.

I really don't see that is wrong with that.....

-keep