Why I Don’t Use Credit Card Rewards Programs

shoppingLoyalty programs have been around for a long time. I remember the old S&H Green Stamp days when folks would paste their little green stamps (which they go from buying stuff) in a book which could then be redeemed for more merchandise available from the catalog.  In case you are interested, you can still redeem these in the new version of this old program at GreenPoints.com.

Any loyalty program is designed to keep you coming back for more – to help you want to spend money in their store, on their merchandise. Credit card rewards programs are no different. The rewards encourage you to charge things on their card. The hope is that you will not pay off the balance and will have to pay interest on that balance.  It’s probably working!

Many people today seem to prefer paying by credit card. Many of them have unpaid balances.

An August 2013 issue of Daily Finance, in an article entitled Credit Card Debt Falling But Still Very High reported:

“According to data from the Federal Reserve, as of July 2013, the average indebted household in the U.S. carries credit card debt of $15,325, although that figure is somewhat skewed by a small number of extraordinarily debt-stricken families and couples.”

Unless you are one of the few that pay off their balance in full each and every time, does it really make sense to carry a card to get loyalty rewards? We have always, every time, for 40 years, paid off the balance each period and avoided interest. To me, credit card reward programs are very similar to coupon clipping. I think they are a pain. I undersand the incentive, but don’t think it is worthwhile for us. Sure, I have heard the stories. My own sister-in-law paid for travel to Hawaii by charging her son’s college tuition (this option, by the way, is no longer available with her card company). I just won’t waste the time it takes to manage the rewards.

We don’t bother with credit card rewards programs. Here is why.

We prefer not to use credit.

If we can’t afford something, I’d rather not buy it. I hate getting a bill for something I ate, digested and eliminated a month ago! Oh, we do use credit – for travel, for online purchases and when we don’t want to write a check or use cash, but we do it sparingly. We are pay as you go type people.

It’s a pain to track the programs.

Card companies are always changing the rules – on how many points you get for each dollar charged as well as the things for which you can redeem them. Your points can expire on you, the card company can take them away from you if you stop using their card or cancel it, and if you pay late, your charged dollars may not count towards rewards.

It’s a pain to use the points.

When I worked for TWA, and traveled a lot on business, I signed up for every airline and hotel rewards card available. I never accumulated enough points to get free flights on other airlines, didn’t want to abide by the ‘blackout’ rules and besides, I already had free flight (standby) privileges – why bother? I did get to use Marriott points once, for the equivalent of two nights stay, off season – after saving them up for 4 years.

We prefer to pick our credit based on factors other than rewards.

We like to look at little things like annual fees; potential interest rate charges should we ever (for some weird reason – such as not getting a statement, which has happened to us) miss making a payment;  and the perceived reputation of the company behind the card. Just because a card offers a reward, even a nice one, doesn’t necessarily make it a good deal – especially for us.

PS, we don’t do coupons either.

Readers, I know most of you probably do use credit card rewards. Are there any among you that share my view?


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