Those credit card rewards might pay off after all.
Earlier this year, experts speculated that banks would cut back on rewards programs in retaliation for the new consumer protection stipulations in the Credit Card Act, say Chicago bankruptcy attorneys. But while some companies are indeed making rewards harder to come by, most banks aren't willing to give up customers to save money.
That's good news for those of us with overwhelming debt - if we use rewards cards wisely.
If you're going to put money on a credit card, you might as well get something back for it, right? Well, yes and no.
Not all rewards programs are created equal. Before signing up for a card, your best bet is to find out how many points you'd earn per dollar, and compare that amount to other rebate cards. Some points expire and some don't. Some cards allow unlimited rewards, while some place limits on maximum point value. These things are good to know -- for instance, if you open up a car rewards account in hopes of discounting a new set of wheels, you may not be happy with a card that only allows you to earn up to $1,000 towards a vehicle.
Most importantly, be careful not to cancel out your rewards. If you carry a balance, you'll probably pay so much interest over time that you'd save money by cutting up your card and simply paying full price for your reward. Even if you pay off your balance each month, it's not worth the money if your card is encouraging you to buy things you don't need just to get more points.
Using credit cards is both a convenience and a curse - it's up to you to find the right balance. And if your debt teeters out of control, know when to seek help. Bankruptcy can be the most effective way to get your debt in check. With our free one-on-one debt analysis, a Chicago bankruptcy lawyer can determine the best bankruptcy plan for you.
