Bank reward programs tied to credit or debit cards or other products can provide you with appealing offers for things such as points to be used for travel and shopping or cash added to your account. But finding great deals is only half of the equation. Before jumping into any rewards program, consider these tips for maximizing the potential benefits and minimizing mistakes:
- Comparison shop different rewards programs, including their fees and other costs, before deciding to apply for one.
- Choose a rewards program that fits your lifestyle. The best way to maximize benefits and avoid spending problems is to choose a program that rewards you for purchases or deposits you would make even without the gifts.
- Remember what it takes to earn rewards. Many credit cards provide rewards when you use them to make purchases, but it’s important to know exactly how much you can earn.
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Teaching Suggestions
- Why is it important for consumers to understand that to make the most of any rewards program, they need to make sure that they do not overlook other, more important account features in addition to the rewards?
- Ask students to comment on the statement: “While rewards can be beneficial, don’t spend just to earn rewards.”
Discussion Questions
- Where should you look for credit cards and other bank products that provide rewards tailored to your particular needs?
- What are some of the perks that credit cards allow for their customers?
- Does overall spending and debt accumulation increase among consumers who use a rewards credit card?
Melissa Hart
Focus on Personal Finance, 7e 