Regardless if you have the ability to PIF your CC each month, do you find yourself spending more to capitalize on rewards (i.e, cash back/points)? I think I do, and when i calculate my gains to that of what the CCC's make each time i use their card, I start to wonder if reward cards are really worth it
I can't say that ill go out of my way to use the card in order to gain points (Only during sign up bonuses). i use the card for things I would purchase everyday with cash and only will use the card if I have the actual amount of cash to pay it off.
When you young with credit, like myself, I use to buy on IMPULSE, now i'm learning to just use my cards for needs not wants! and for only my montly recurring bills that i would usually pay for with my debit card. B/c B4 i found myself living beyond my means, awh growth is good.......
This is a recognized issue (and is why banks issue reward cards in the first place!)
Credit cards that give cash back prompt consumers to spend more and accrue more debt, according to researchers at the Federal Reserve Bank of Chicago.
The initiation of a 1% cash rewards program yielded, on average, a $25 reward each month—and an increase in spending by $68 a month and in credit-card debt of $115 a month, the economists say in a paper to be presented at the American Economic Association meetings next week.
For banks and other card issuers, small rewards programs work as intended, the researchers conclude. "Our analysis suggests that in an extremely competitive credit-card-issuing market, rewards are another tool, along with lower interest rates, to steal customers from competitors."
No I don't spend more to get points, I don't care if the card offers 5% cash back or what I prefer the 100% cash back for every $1 i don't spend.
But when I was going to spend the money anyway I try to pick the card with the best rewards. Just cashed in 12,500 MRE points from AMEX for $125 in gift cards to local resturants. Second time I have done this in a year Feels good to have about $225 in benefits from cards that have a AF of $40 a year ( zync + packs).