The excuse I often hear from people if they're not using a rewards credit card is that they don't like the annual fees or they don't want to pay annual fees. But what they are unaware of is there's actually a lot of reward credit cards out there that come with no annual fees and some of them are actually really really good! For example take a look at our Ultimate No Fee Travel Rewards Credit Card portfolio, cards in here have returns of over 2%! That's pretty amazing considering a lot of cards fee or no fee can't earn over 2%.
An argument people use as well is that reward credit cards or credit cards in general raise prices. While this may have been true quite some time ago, it's the norm now. Prices are going to be increased all the time whether or not the store accepts credit cards. Prices will go up or down and free market competition reigns so that means the place that doesn't accept credit cards is competing with a place that does and a place that does has to match the other vendor's pricing. A good example of the market at work is with gas stations. This goes beyond credit cards and looks at loyalty programs in general but is the same concept. You can go to a gas station on one corner that offers nothing and they're selling gas for $1.10 per litre. You go across the street and there's an Esso and they're selling gas also for $1.10/l and you can collect Esso Extra points or Aeroplan miles. The question is why would you go to the gas station that doesn't give you something back.
Another argument comes from the merchants. They complain that credit cards are expensive and cost them money. However study after study shows people who come in and spend with a credit card actually spend more than those paying with cash. Especially those who have premium cards, premium card typically mean higher income and more disposal spending power. In the long run it tends to be the credit card consumers who make more money for the merchants than those paying cash.
All right that intro may have been a little long-winded and we should go back to original question: Why aren't you using a rewards credit card? There are only two types of people who should not be using a rewards credit card:
- You live your life cash only. No credit cards at all. You're old school. You hate them and what they have done to our society, lifestyle etc. or you don't want to be tracked. You are Jason Bourne and you can't have the government watching you. Cash is king and no one has to know what you are doing with your cash.
- You cannot be financially responsible with a credit cards. You only make minimum payments, frequently hit your credit limit and will take two hundred years to pay off your balance. If you are one of these people do not get a rewards credit card. Get a low interest one. Better yet don't get one at all. Consolidate your debt and work your way out.
If you don't fit into the persona of the two types of people above there's no reason why you shouldn't have a rewards credit card. It doesn't matter if it is travel rewards, cash back, retail rewards or whatever. Just don't get cards that don't offer you anything for using the card. Why would you do that? You can get cards that have fees or no fees that will reward you no matter what. Switch right now and get one that gives you something! Even a half percent return is better than 0!
There you have it, now why aren't you using a reward earning credit card?
Resources on Rewards Canada to help you pick a rewards credit card:
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