Worst rewards card ever?

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills.
Post Reply
Topic Author
ilskeptic
Posts: 61
Joined: Wed Feb 10, 2010 10:35 am

Worst rewards card ever?

Post by ilskeptic »

Commerce Bank now has asked me twice to sign up for my "new Pre-Approved Commerce Bank Rewards Visa credit card." The rewards? One point per dollar in purchases and "3x points for every dollar in interest accrued on your monthly balances."

Wow, talk about perverse incentives.
DEBTINATOR
Posts: 125
Joined: Thu Oct 20, 2011 8:05 pm

Re: Worst rewards card ever?

Post by DEBTINATOR »

That's pretty ruthless.
User avatar
Imperabo
Posts: 1109
Joined: Fri Aug 29, 2008 1:00 am

Re: Worst rewards card ever?

Post by Imperabo »

So . . . it effectively reduces your interest rate from 20% to 19.4%. Something like that?
User avatar
grabiner
Advisory Board
Posts: 35265
Joined: Tue Feb 20, 2007 10:58 pm
Location: Columbia, MD

Re: Worst rewards card ever?

Post by grabiner »

ilskeptic wrote:Commerce Bank now has asked me twice to sign up for my "new Pre-Approved Commerce Bank Rewards Visa credit card." The rewards? One point per dollar in purchases and "3x points for every dollar in interest accrued on your monthly balances."

Wow, talk about perverse incentives.
I have seen this on other cards as well; around 1998, First USA created a rewards plan which gave points for your purchases but more points if you carried a balance.
Wiki David Grabiner
travellight
Posts: 2892
Joined: Tue Aug 12, 2008 5:52 pm
Location: San Diego

Re: Worst rewards card ever?

Post by travellight »

I laughed out loud; this is almost a joke!
364
User avatar
tfb
Posts: 8397
Joined: Mon Feb 19, 2007 4:46 pm

Re: Worst rewards card ever?

Post by tfb »

Worst? No. Between this card and a run of the mill 1% rewards card, if you don't incur any interest, you are even. Like it or not, some people do incur interest. For them, this card is better, if the interest rate is the same on two cards. Therefore you are at least as well off with this card as a run of the mill 1% rewards card. I'm sure there are cards with lower rewards than 1%. Some cards don't have any rewards at all.
Harry Sit has left the forums.
User avatar
tadamsmar
Posts: 9972
Joined: Mon May 07, 2007 12:33 pm

Re: Worst rewards card ever?

Post by tadamsmar »

At the credit card companies they call people who pay off their balances each month and never pay interest "deadbeats"
sscritic
Posts: 21853
Joined: Thu Sep 06, 2007 8:36 am

Re: Worst rewards card ever?

Post by sscritic »

tfb wrote:Worst? No. Between this card and a run of the mill 1% rewards card, if you don't incur any interest, you are even.
You read one point as $0.01.
One point per dollar
I read one point as one point. One point might be worth 1/10 of a cent, but only if used to buy subscriptions to magazines you don't want.

I don't have cards that pay points; I only get cards that pay dollars.
Default User BR
Posts: 7502
Joined: Mon Dec 17, 2007 6:32 pm

Re: Worst rewards card ever?

Post by Default User BR »

tadamsmar wrote:At the credit card companies they call people who pay off their balances each month and never pay interest "deadbeats"
This old myth. If they thought that, they'd get rid of people who didn't carry a balance instead of fighting over them.


Brian
User avatar
tadamsmar
Posts: 9972
Joined: Mon May 07, 2007 12:33 pm

Re: Worst rewards card ever?

Post by tadamsmar »

Default User BR wrote:
tadamsmar wrote:At the credit card companies they call people who pay off their balances each month and never pay interest "deadbeats"
This old myth. If they thought that, they'd get rid of people who didn't carry a balance instead of fighting over them.


Brian
Someone who worked at a credit card company told me that they used that term in the office. I agree that it's more of joke than something the companies would take seriously, I assume they make some money of of the non-interest-payers since they get a merchant fee.
User avatar
jeffyscott
Posts: 13438
Joined: Tue Feb 27, 2007 8:12 am

Re: Worst rewards card ever?

Post by jeffyscott »

sscritic wrote:I don't have cards that pay points; I only get cards that pay dollars.
I used to do the same, but points/miles from cards we signed up for in the last year, plus an additional $300-400 in fees, have paid for airline tickets for 4 domestic round trips and 2 round trip tickets to Europe. These tickets would have cost us probably close to $4000 and we still have over 100,000 points/miles remaining. Required spending to collect all these points/miles was about $7000.

So far it does not look like I'll be keeping any of the points/miles cards, so I also may soon not have them, but I will be happy to get more of them in future. :)
Bacchus01
Posts: 3182
Joined: Mon Dec 24, 2012 8:35 pm

Re: Worst rewards card ever?

Post by Bacchus01 »

tadamsmar wrote:
Default User BR wrote:
tadamsmar wrote:At the credit card companies they call people who pay off their balances each month and never pay interest "deadbeats"
This old myth. If they thought that, they'd get rid of people who didn't carry a balance instead of fighting over them.


Brian
Someone who worked at a credit card company told me that they used that term in the office. I agree that it's more of joke than something the companies would take seriously, I assume they make some money of of the non-interest-payers since they get a merchant fee.

The merchant fees they collect with almost no risk far outweigh the risky interest from the balance-carriers.
Post Reply