Summary
Credit card incentive programs come in all shapes and sizes including earning frequent flyer points, free hotel stays and cash rewards. But, it's important to remember that while a cash reward may feel good in your pocket, paying off debt should come first before a credit card perk. And if you carry a balance on your credit card, the interest rate should be your first consideration over any rewards program.
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http://washingtontimes.com/business/20050112-093403-8957r.htm
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Is that better than earning points that can be exchanged for airlines miles or goods and services?
Mr. McKinley said about half of the estimated 670 million cards held by Americans last year offered some kind of reward.
Before deciding what kind of benefits you want from credit cards, take a hard look at your spending.
If you carry a balance, the first consideration should be the interest rate on the card and not the rewards program, said Greg McBride, senior financial analyst for Bankrate.com, a personal-finance Web site.
Your spending habits, personal preferences and price of the card also should be considered when deciding which perk program suits you best.
For example, if you charge about $5,000 a year and pay a $50 annual fee for an airline card, it will take five years and $250 to earn the "free" domestic ticket, which typically require 25,000 miles.
Overall, though, airline cards do offer a decent value for cardholders, Mr. McKinley said.
He noted that airline mile costs 2.5 cents, so if you get one for every dollar spent, the return is 2.5 percent.
But Mr. McKinley also pointed out that General Motors Corp. has a card that offers a 5 percent rebate that can be used toward purchasing one of its cars.
Some offer more when spending exceeds a set point, or give more for certain kinds of purchases.
But cash rebate cards do have an advantage --- you can get a reward annually and can use the money any way you choose.
Mr. McKinley said he had been saving points to go on an African safari, but when he closed in on the necessary number, the trip disappeared from the company's perk program.
About the author: Mike Adams is a consumer health advocate and award-winning journalist with a strong interest in personal health, the environment and the power of nature to help us all heal He has authored and published thousands of articles, interviews, consumers guides, and books on topics like health and the environment, and he has authored and published several downloadable personal preparedness courses including a downloadable course focused on safety and self defense. Adams is an independent journalist with strong ethics who does not get paid to write articles about any product or company. In 2010, Adams co-founded NaturalNews.com, a natural health video sharing site that has now grown in popularity. He also launched an online retailer of environmentally-friendly products (BetterLifeGoods.com) and uses a portion of its profits to help fund non-profit endeavors. He's also the founder of a well known HTML email software company whose 'Email Marketing Director' software currently runs the NaturalNews subscription database. Adams volunteers his time to serve as the executive director of the Consumer Wellness Center, a 501(c)3 non-profit organization, and regularly pursues cycling, nature photography, Capoeira and Pilates. Known on the 'net as 'the Health Ranger,' Adams shares his ethics, mission statements and personal health statistics at www.HealthRanger.org
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Tuesday, January 25, 2005
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