Who Actually Pays For Credit Card Rewards?

To put it simply: don’t spend money you don’t have, and always pay off your monthly debt in full.

I treat my credit cards like debit cards. I spend only what I know I have, and pay my credit card off in full.

“If everyone made the rationally correct decision at every point, the banking industry would probably not exist.” Profoundly true.

My Amex limit is about $7,000 a month. I’m fully aware I could not afford that level of spending, so I only spend about $600-$700 a month because I know I can afford to pay it off, in full, every month.

You need to use a credit card like a debit card. If you carry a balance except for large planned purchase, you're gonna have a bad time

I dont even wait for the end of the month, as soon as a pending purchase goes through, I pay it the next business day

I went in-person to my bank to ask some questions about a new rewards card they were offering. I must have come off as a little clueless because the employee I was speaking to had this moment where he looked at me for a long second, covertly checked where his boss was, and told me quietly, "The bank only wins when you fail. They are expecting you to fail." I personally did not need that warning, but he made a judgement call about my financial literacy and instead of selling me on the card, he tried to protect me. Thank you, bank dude.

People in credit card debt got a credit card without knowing how to use it. It’s an education issue, not a credit card issue. I had a bankruptcy because I was stupid and didn’t know how to use credit, then I learned and now I’m raking in rewards with no problems.

I never once paid any interest in 20 years.

Simply pay it off at the end of each week……… if you know you won’t have the money, stop spending over the amount you earned.

I alway pay all cards off in full. I keep them all on autopay, but I keep track via a spreadsheet to make sure I don't overspend. I had a record amount of cash back this year and work actively to maximize our cash back/ travel points from month to month on basic purchases.

This is not a credit card issue, this is a user error issue. Knowing how to leverage debt and maximize the rewards of a credit card is very profitable.

Don’t even look at the credit limit. You should know how much you can afford monthly, so you can pay it off weekly or by the end of the period. If you can’t pay off the card, then you should use cash or debit card.

One more thing about rewards programs becoming less valuable is that they already are. United and Alaska airlines have just raised redemption costs for points by about 30%. Same with Marriott Bonvoy. The reward card industry gets to charge alot in fees/interest but they also get to devalue their points whenever they feel like it That being said, I do love my cards and carry no balances, but tighter regulation for credit cards may be necessary

I got in trouble with cards many years ago when I was living paycheck to paycheck. I only owed $2-3,000 USD, but it was still a struggle to eliminate them. I cut up my cards and closed the accounts. I now have a job with a lot of travel. For the first several years, I could only get $350-500 credit, so had to keep some cash in a separate checking account to cover work travel. My credit then improved from lousy to great over a 3 year period. I do use a card with a cashback reward for travel and I pay it off before the due date. So I make a few hundred $ a year. But I am at a point in my life where I can afford to pay it off. I am well aware of the trap because I have been there. It isn't designed for the benefit of the consumer.

The problem is there's nothing merchants can do about the interchange fees except not accept credit cards. The credit card companies can thus charge pretty much whatever they want for those fees and obviously the business is going to pass as many of those on to the customer as possible. The only thing the customer can really do about that is get the card with the best rewards. The banks actually do compete on rewards and you might even be able to come out ahead on the interchange fees if the rewards are high enough or if you have multiple cards and are able to max out the rewards categories on each of them.

Yeah, you do lose money using a credit card as opposed if someone’s paying you in cash as a merchant but you have to understand this now there is a cost of cash. There’s a risk of theft cost of cash delivery services, and the time and energy cost of employees/owner to correctly organize and process the cash correctly credit cards alleviate that you have to take that into consideration as a merchant

Pay my cards off weekly. Get $3000-5000 back each year. Have not paid interest in years.

I have literally never paid a credit card fee or interest in my life. Just pay it off every month or don't use it if you cant.

As a CPA-I'm furious how taxpayers still believe credit card interest is deductible on their individual tax returns!