There are so many different types of credit cards offered in 2018 that appeal to travelers, especially those who are enticed by rewards, such as airline miles, hotel discounts, and other various travel friendly perks that are “earned” by spending money using plastic. Many websites and blogs exist that cater to taking advantage of these programs (like this well-known one), and these seem to be increasing in popularity all the time.
I am a contrarian compared to most of my travel obsessed peers when it comes to travel rewards credit cards. I do not use them at all and have no interest in them. Why not?
The main reason I do not use these cards is I believe, in the long term, that they encourage you to spend more money than you otherwise would have.
Credit card companies are not dumb. They’re not just going to give you something for free without a high probability that they will eventually make money off of you. For example, there are almost always spending limits when you open an account with bonus rewards, such as needing to spend $3000 on that card within a time span of a few months. I don’t know about you, but if I were to have an arbitrary dollar amount of spending I needed to hit within a certain time frame, then the state of my financial brain would be much different than if I were living my daily life without such a requirement. I’d be on the lookout constantly for things I “needed” to spend my money on in order to make sure I hit that number.
Same thing with airline miles. Back years ago when I paid more attention to miles, I caught myself several times seriously considering a more expensive flight with a particular airline because of the handful of miles that I would obtain. When I actually sat and did the math, I figured out that it would have been a pretty stupid move to go with the pricier flight just to acquire some miles that I may never get to use. Later that year, Delta changed their rules and I lost all my miles anyway. People were furious at the time, but I didn’t care since it didn’t affect me in any notable way.
Along a similar note, this is why I also do not bother to clip coupons or wait for sales to buy stuff. The entire purpose of coupons is to get you inside the store promptly (before the coupon expires) to spend a bunch of cash that you may not otherwise have spent. And buy several other items at full price that you don’t have a coupon for, because hey, you’re already at the store so you might as well.
The reason why all the above methods are such smart advertising tactics is that they work subliminally, and no one believes they are affected. Very few people are going to admit that they are being hoodwinked into spending more money, and even if they put pen to paper and run the numbers, I bet most will still find some convoluted excuse to justify the extra spending. All the children at Lake Wobegon are above average, after all (explanation here if you’re unfamiliar with this phrase).
When I find the need to buy stuff like clothes, I go to the store or online and buy it when the occasion calls for it. If it happens to be on sale, then that’s great, but otherwise I have no problem paying full price. Here’s an excellent article on buying full price clothes that I won’t expand on because there’s no way I can say it any better.
I completely agree with the premise: sales, as well as coupons, travel rewards points, and airline miles are deliberately designed to subtly encourage you to spend more of your money and fool you into thinking of the purchase as a smart move. But even ignoring that aspect of it, I don’t participate in this stuff because it’s just too damn complicated. I strive for simplicity in my life, and this does nothing to help the cause. I would much rather spend a little bit more on the front end and save in the long term and not muddle up my life with more numbers, credit cards, accounts, and little bits of paper to keep track of.