Credit card rebates reward your normal spending
Credit card rebate programs can be a great way to get rewards just for spending money that you would have spent anyway. The ever increasing variety of reward programs can give you cash back, free airline tickets, free hotel stays, gift cards, merchandise of every description, or even automatically invest in an IRA. Just imagine paying bills, getting gas, and buying groceries and watching your retirement savings grow!
Credit card companies don’t just give away free stuff for fun, however, and therein lies the important caveat: If you don’t pay your credit cards off in full every month, DON’T use them. The 3% rebate on gas doesn’t look nearly as enticing when you are paying a 21.95% APY to get it. Add to this the constantly growing list of fees and charges and reams of fine print that are standard in the credit industry, and it becomes clear that there is really no margin for error if you choose to use plastic instead of cash.
So is it worth it? The answer depends on the person. If you don’t mind spending the time to comparison shop for the card that gives the best rewards for your desires and use, make the effort to read and understand all the terms and conditions, and pay off the full balance well before the due date each month, then a rebate program can be a convenient source of “found money”. On the other hand, if you carry a balance or forget to make payments on your current card, you will end up paying far more in interest and fees than you will gain in rewards.
In the end, I think you’ll find that with a little bit of discipline and the right card, you might just be able to pay for your next vacation, or retire an extra year early, just by using a reward credit card for your everyday expenses!