Every credit card offer isn’t a deal. The reality is that many of them are marketing ploys disguised as offers, and it’s important to recognize that. The following are some ways these offers may cost customers more than they bargained for.
Reward Programs
One common marketing ploy involves rewards. The credit card company puts out a program where the customer is given some type of reward, usually cash back, if they spend a certain amount of money. While it may seem like customers are winning, they may not. Many customers spend money they wouldn’t have to get that reward. The credit card company wins when this happens.
Better Marketing
It would be nice to avoid credit cards altogether. These plastic cards usually cost users more than they bargained for, but avoiding them is hard in today’s society. Since these may come in handy, it’s wise to get the best deal out there. The problem is that people often miss out on the best credit card offers because they focus on the most popular credit card companies. According to Lantern by SoFi, it’s smart to compare credit card offers to find the right one.
Sign Up Bonuses
Another tactic used by credit card companies involves a bonus offered to first-time users. The bonus usually sounds pretty good, and it’s usually monetary. The user has to spend a specific amount of cash within a certain time frame to get this bonus. Customers are normally given about a year to reach this goal. If a user was thinking of spending this money, this can work out and may be a good idea. If that isn’t the case, then the customer loses. This will turn into an incentive to buy more than the user intended.
Zero Interest
This is a big offer, and it entices a lot of folks. The problem is that the zero percent interest rate offer ends, and all of a sudden, the customer will start owing a lot more on their credit card. If the debt is paid before the offer ends, the customer wins. Credit card companies bet that people won’t pay back before the offer ends, and they are usually right.
Spending Credits
The spending credit marketing scheme is pretty smart. It promises customers that the credit card will cover certain expenses when it’s used. For example, maybe it’ll cover $100 in travel fees and expenses, which seems great. It’s a major discount unless this spending credit starts to make the user feel like he or she flies more often. If this happens, then the user is overspending. That’s the last thing anyone should want except the credit card company. Spending credits come in many forms. Some come in discounts on food delivery services or ride-sharing apps, just as a few examples.
That’s the truth about credit cards. It’s not a great truth to find out, but knowing this could help folks find the best deal they can find to save some money.