Banks entice their clients by providing loyalty schemes which are highly used these days. People are so into freebies, points and rewards that they get from these credit card providers. These bank schemes are developed to encourage more people to take out a new credit card. Some may not need another credit card but because of the irresistible offers and loyalty points provided by banks, they find it impossible to decline the offer mainly because they get something from it. This is the reason why credit card providers are encouraged to work hard on their advertising schemes and promoting their credit cards.
As you watch or read the ads about a credit card promotion, you easily get tempted. You see these huge ads in newspapers, fliers and even TV commercials. Their goal is to convert and encourage you to take a new credit card. It is pretty obvious that they do not provide you a clearer reason why you should obtain another card. They want you to keep on spending – using their plastics. Keep on scratching these plastics and you’ll get this and that. You earn points by using it frequently which in exchange can be converted into something like a phone, appliance or other discounts. Who wouldn’t fall for this type of ad? Everybody loves freebies! But is it really free?
The zero interest schemes are just one of the many tactics of major credit card providers. Yes it is zero interest payable in 12 months but take a closer look. If you pay in cash, you’ll get it with a bigger discount.
What are the common risks as you use these credit card schemes?
- You need to spend an average of X amount before you get the reward. For example, you need to spend at least $20,000.00 to be able to receive a $100.00 gift card.
- Rewards are available if you make on time payments.
- Credit card providers are becoming less generous these days. How much do you need to spend to be able to obtain a generous amount of perks? Calculate and do your math. Are the perks provided by your credit card provider is too small? Are you happy with it? Match it against the amount that you have to spend. Ask yourself, do you really need to spend that much for a phone?
Many are protesting about these schemes because they are getting too little from what they have spent.