Credit Card Promotions - Are They Worth Effort?
My friend's credit card promotion story
Michael told me his credit card promotion saga.
He signed up for the major bank credit card offer that promised $50 cash back.
Initial credit card application took him some time but the ID check was declined after he got the card. The bank explained that it was for some subtle technical reason.
Michael had to wait for 13 days days before his account was activated. Fortunately he had online access to that credit card,
so he was really surprised that the first credit card statement was wrong.
Because of that mistake he did not qualify for credit card promotion and did not get his cash back.
Michael is not a big earner and even $50 are important for him. So he called the bank and someone politely explained to him the subtle point of disqualification he misunderstood in the credit card promotion offer.
No through road (unless he would contact the banking ombudsman!).
No big drama: just $50 not received (not lost!), few hours wasted but great disappointment, frustration and shuttered belief in the sinc3erity of banks.
Credit card promotion implications
In fact that applies to any promotions. Think about this: why would any company offer anything for free or cheaper?
In some cases it is a genuine strategy to push NEW product or make a marketing statement.
For example some new bank willing to "steal" some customers from existing financial institution might come up with credit card promotion.
In this game they would be happy to lose some bucks to get new clients with potential growth of the business.
When I receive a credit card promotion from well established bank I worry about their shareholders (Are things so bad?)
or I would take it with a grain of salt.
Potential benefits of credit card promotion
It can be some cash back, no-fees or lower interest rate for a limited period of time - right?
A friend of mine who was in financial trouble has been changing credit card providers for 3 years now. He is always on the search for a new credit card offer (usually 6 months lower interest), switches to it, moves his debt into new credit card and enjoys almost free finance.
That allows him to stay afloat and eliminate bad debt credit loan.
Would he be doing this if he was financially OK. The answer is no. Reason: it takes too much time and IS STRESSFULL !!!
Let's get back to Michael's case of credit card promotion.
The benefit of that was just $50. Of course anyone - even rich people - would be stupid not to pick a $50 note on the street.
But how about our time?
The truth is that we all sell our lives to our employers or clients. That is why everyone has an hourly rate.
Before committing to any credit card promotion check your rate. Would the deal be worth it?
Michael - my friend - is a photographer. He charges $120 per hour in studio. Unfortunately he has plenty of "windows" in his bookings. So he thought that $50 credit card promotion is worth it.
How about another scenario for him: spend few hours, select your best photos and submit them to stock photo websites. In a long run that could earn him probably more that he would have from credit card promotion.
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Credit Card Promotions - Are They Worth It?
Attracted to credit card promotions consumers often end up with disappointment. My friend complaint recently that he not only lost the benefits of the gofer, but also was worse financially. He also lost time. Before rushing your credit card application - think about implications of credit card promotion.