Look No Further for the Best Cash Back Credit Card Offers

09
October

Those TV commercials about cash back rewards programs with credit cards sound too good to be true. If you are like most Americans, you spend hundreds or even thousands of dollars over the course of a month on purchases that could be made with a credit card. These purchases may include necessities like groceries to feed your family, gas for the car and more. Of course, you may also make extra purchases, such as the occasional night on the town or a trip to the mall to update your wardrobe. The dollar signs may be swirling in your head as you imagine all of the money you could earn through a cash back rewards program with these purchases. However, there are several reasons why you should look no further for cash back credit card offers.

Credit Card Companies Want Your Money
The credit card industry has enjoyed profits to the tune of about $30 billion per year on average in recent years. This is by all accounts a money-making industry, so credit card companies are not simply going to give you money. Cash back rewards programs are designed to entice you to make purchases, and credit card companies are banking on their rewards programs to work for them. So how do credit card companies make money by offering you cash back for your purchases? First, not every consumer will pay off their balances in full each month. Any balance that you do not pay off on a given month will have interest charged on it. Keep in mind that 15 to 20 percent interest rates are the norm for most credit card accounts. Further, credit cards will charge annual fees on the cards themselves, late fees on monthly payments that are only a few days late and even an additional annual fee to participate in these rewards programs. Further, many credit card rewards programs limit the amount of rewards you can earn in a given month, and this further decreases the benefits available to you by participating in a rewards program.

Debt Issues
A rare few number of consumers may actually enjoy making money off of a cash back rewards program. These are consumers that have the credit rating necessary to qualify for the best cash back rewards programs and who are obsessive about paying back every penny they charge onto their cards to avoid accruing debt. Some will even rush home after making a credit card purchase and immediately send a payment in the exact amount of their purchase to the credit card company. Most, however, will find it difficult to pay off their balances in full each month, and a problem with growing debt will ensue. Even those who are diligent about paying off debts initially may eventually fall behind on payments.

Extra Purchases
It is common for those who have a credit card with a cash back rewards program to make extra purchases. These may be small purchases with their credit card, such as splurging on a new pair of shoes at the mall. They also may be large purchases, such as paying for the family’s entire summer vacation with the credit card to rack up rewards points. These are sometimes purchases that you may not have otherwise made, or they may be purchases that you may have otherwise saved up your pennies to make. Even credit cards without a rewards program in place entice people to spend money they just don’t have and make purchases on things they just don’t need. When your credit card does have a cash back rewards program in place, however, the temptation to spend money in order to make money is difficult to resist. Why would you put yourself in the position to be tempted in this way?

The fact is that cash back rewards programs are just another way credit card companies entice you to open up new credit card accounts and make charges with them. If you have the desire to live a financially responsible life that is free of debt, it is best to avoid cash back rewards programs altogether.

This post was written by

jason – who has written posts on Budget Clowns.
Father of three and married to a lovely women. Always looking for ways to save money, and invest it properly for my children's future.

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