alspeirs | 12:19 pm | May 31, 2008 | Credit Cards
Do credit cards that reward you for spending money put you off? It’s a tricky sort of incentive. You could almost justify overspending on your credit cards if you are earning cash back rewards when you make purchases.
If you’re planning to purchase a TV that costs 1,000 dollars, why not purchase it with a card that will pay you back 2 percent of that purchase? It sounds like a great deal, until you get the bill and decide to wait a month or so to pay it off in full. Next thing you know, the interest you’re paying far exceeds the value of the cash back “reward.”
There’s a better option for individuals who would like to earn rewards based on something that actually works to their advantage. ANZ Credit Cards offer rewards based on how much you pay on your credit card balance. You won’t earn any rewards by charging your TV on your ANZ credit card, but you will earn reward points for every dollar you pay on the balance when your bill comes in. The reward points add up to gift cards and shopping vouchers with popular retailers. The reward incentive isn’t to overspend, but to pay down your balance.
Of course, you have to spend in order to create a balance, but at least you’re more likely to stay motivated to pay the balance off. ANZ offers Low Interest Credit Cards as well as an alternative rewards program, so if you do happen to carry a balance, you won’t overpay in interest.