“Many of the listings that appear on this website are from companies which we receive This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). The site does not review or include all companies or all available products. The editorial content on this page is not provided by any of the companies mentioned and has not been reviewed, approved or otherwise endorsed by any of these entities. Opinions expressed here are author’s alone.”
When it comes to credit cards and rewards, there are numerous trends I find annoying. For example, it irks me that about 1/2 of the rewards enthusiasts I meet are “one-uppers” – as in, they can’t talk about travel without trying to one-up your story or your location. And I can’t stand it when people carry a balance on their credit cards (usually paying 15%+ in interest) but still pursue rewards.
One final trend I can’t stand – when people shop and buy stuff just to earn rewards – has really sent me over the edge lately. Maybe it’s because it’s holiday shopping season and everyone is in a frenzy, but I have heard some pretty over-the-top rewards strategies lately.
Buying Stuff You Don’t Need = Bad
Case in point: Recently, someone told me they bought a new sofa and loveseat on Black Friday because they had to meet a minimum spending requirement. They weren’t really planning on buying a new couch, they said, but it was a really good deal and they had to meet the spending requirement on their Chase Sapphire Preferred card.
So, they earned 50,000 points worth $625 in travel. That’s good, good, but they spent untold thousands on new furniture they didn’t really need (If you want more information about this card and other rewards cards head here.)
Then, there was a girl who posted in an online forum I belong to about her desire to rack up rewards on her gambling spend. She had just signed up for The Platinum Card from American Express, she said, and she had to spend $10,000 in 90 days.
She was going to a famous casino resort in the Caribbean and figured she could use her credit card to buy chips then roll the dice. And when I questioned her about it, she said she was “fine losing the money” so she figured she might as well earn rewards.
All I could do was shake my head. It’s one thing to buy chips with a card to earn rewards then turn them right back in. But it’s an entirely different thing to gamble that money knowing you could very well lose it all. And that doesn’t even take into account the fact she signed up for a card with a $10,000 minimum spending requirement without having any way to reach it. Bad, bad idea.
Please, Don’t Send Me Flowers
Finally, let’s talk about flowers. Most of the credit card portals let you rack up some serious rewards for buying flowers from various vendors. At the moment, you can earn 15 points/$1 at FTD.com, FromYouFlowers.com, and ProFlowers.com through the Chase portal, for example. So, if you’re actually going to buy someone flowers, you might as well click through, right?
The problem is, people see these high earning rates and just decide to send flowers to all sorts of random people. A guy told me recently that he needed to earn 2,000 Hyatt points for a specific redemption, so he just bought flowers through the Chase portal for a bunch of people – his wife, his boss, and his mother-in-law to name a few. In the end, he spent around $200 on flowers and earned 3,000 Chase points. The funny thing is, he had to wait weeks for these points because Chase portal points take a while to post. So, he didn’t even have them in time.
I think he just got so caught up in the hysteria and the allure of earning 15 points per $1 that he just failed to do the math or to even think through his strategy.
The Bottom Line
While earning a ton of credit card rewards is always a good thing, you’re not really helping yourself if you’re making irresponsible financial decisions along the way. If you’re wasting money to earn rewards, you’re likely worse off than if you had just skipped the rewards to begin with.
As you push through the end of the year, I challenge you to think through every purchase and ask yourself if you really need it. Free travel is nice and worth pursuing, but not if you have to buy a bunch of crap you don’t need.
What are your top rewards pet peeves? Do you know people who buy stuff they don’t need to earn rewards?
“Responses are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.”
No comments:
Post a Comment