Is Your Rewards Card Really Rewarding You?
Conventional financial wisdom for the last 10 years has been that you need a rewards card. There’s another bit of conventional financial wisdom, though, there’s no such thing as a free lunch. Free rewards sound great, but are you really getting everything you’re promised? Airline companies, faced with rising costs for fuel and labor, have started to cut costs everywhere they can. To understand how airlines save money by cutting your rewards, it’s helpful to understand the rewards systems.
Airlines use miles systems to build loyalty. The more you fly, the more points you get. These points can be used for all kinds of travel perks. The intent of such a program is ensuring you consistently choose the same airline by giving you some kind of reward that’s commensurate with your amount of traveling.
Other companies, mostly major credit card companies, also want to reward you for using your card so you’ll use it more. They buy blocks of reward points from airlines and award them to you for card usage. The airline makes money from the sale and they also use the rewards as a way to promote their services.
When it comes to points, airlines can lower costs in two ways. They can make them more difficult to spend or they can give fewer of them. Right now, things are so bad for the airline industry that they’re doing both.
This means that, unless you fly a lot, regularly make upgrade purchases, or otherwise spend a lot of money on air travel, you’ll be getting fewer rewards.
Given this change in policy, it might be time to take another look at your rewards card. Is it still the best bet for your money? If you’re thinking about cutting the card, check out these factors:
Are you paying an annual fee?
If you’re paying money every year to use the card but you’re not getting more than that amount in rewards, your credit card is a losing proposition. Check your billing statement for this information – and don’t forget to check the fine print. NECU’s VISA Rewards credit card has a great rate and NO annual fee!
Are you paying an extremely high-interest rate?
If you pay the balance in full every month, you might not ever think to check your interest rate. Suppose, though, that something unfortunate happened – you or your spouse lost your job, you lost track of the date, or otherwise forgot to pay the bill. You could rack up significant financing charges on one month’s expenses. At NECU we offer competitive rates on our credit cards, and our VISA Preferred credit card has the lowest rate in our credit card line-up!
Are you paying a fee for balance transfers?
We know that sometimes it’s easier to manage our balances in just one card, but when we have to pay fees on balance transfers, this option becomes less attractive. At NECU, we don’t charge you for any balance transfers. We want to help you and make your life easier.
If any of the above is making your rewards card less of a reward and more of a chore or added expense, it might be time to look closer to home for your credit card needs. Northeast Credit Union we offer a variety of cards to choose from; find the one that best fits your lifestyle.
Because the card is offered through your credit union, you know you can get the same caliber of service you’re used to getting from the people helping other people in our community. You can save money on fees and interest, as well as save time and frustration dealing with big, unfriendly credit card companies. Instead of counting on programs for rewards you may never see, put the money you save with a low-cost credit card from Northeast Credit Union into your savings account. Now that’s a real reward!
Think and read all the important documents carefully, then pick up the phone and call 1-888-436-1847, visit your local branch, or apply online. Our friendly staff will gladly help you make the switch.