Free Credit Card Bonuses Are Pricey if You Fail to Pay Your Bill
Many credit cards offer all kinds of bonuses that may make it worth your while to choose one card over
another. Just remember that if you fail to pay your bill in full, you are paying more than the bonuses are
Debt consolidation, debt management, credit counseling, bankruptcy, credit cards, home equity loan, line of
credit, interest rates, free credit report, payday loan
The credit card business is a competitive one. It is also a very profitable one and the combination of the two
explains why you seem to find a pre-approved application in the mailbox just about every day. A new
customer is worth a lot to the companies that issue credit cards; most consumers will spend thousands of
dollars in interest during the time they carry the card.
Because the business is so competitive, many card issuers offer various bonuses and incentives to help them
acquire and keep customers. These incentives may include frequent flier miles, discounts on baseball
tickets, cash back bonuses and more. For someone who has an interest in the particular type of bonus
offered, these cards may offer a better value than another card of the same type. But consumers would be
wise to remember that these bonuses are not offered out of kindness, they are offered in the expectation that
you, the consumer, will pay the company far more than the bonuses are worth in interest. There is no such
thing as a "free" bonus; the companies expect you to pay for them.
The average American household has nineteen credit and debit cards and debt that exceeds $9000. With
that kind of debt, most consumers are clearly not paying their bills in full each month. And by not paying in
full, they are paying a great deal of interest, as most bank cards carry interest rates that range from 10-30%
per year. The "free" bonuses are funded out of the millions of dollars in interest that are paid by consumers
who don't pay in full.
On the other hand, if you are a savvy consumer, you can take advantage of these freebies by carefully
shopping for a card that has bonuses that suit your needs. You can then use the card carefully by
remembering to pay the bill in full each month in order to avoid paying more in interest than the bonuses are
Some types of bonuses include:
Baseball affinity cards - You can get a card with the logo of your favorite baseball team, and even get a pair
of free tickets just for signing up.
Cash back - The Discover card offers a cash rebate for a portion of the amount you spend each year. This
could amount to as much as 1% of the total amount spent.
Extra warranties - Some cards, like American Express, offer extended warranties for merchandise purchased
with the card. Should the item break, you may get it repaired or replaced at no charge.
These are but a few examples of the hundreds of different types of bonuses offered by the credit card
companies to try to entice you to use their card. The offers are real and the benefits are great. If you like
baseball, get the card from your favorite team. If you like to fly, get a card with frequent flier miles. Just
remember that failing to manage your bill properly will leave you paying far more than those bonuses are
worth. Otherwise, that "free" plane ticket could end up costing you thousands of dollars.
credit disputes letters