A credit card that rewards you for paying off your balance rather than racking up a higher balance is only different from the timing point of view. You still get rewarded for the same amount of purchasing, but the difference is that the bank doesn't have to pay you rewards until you've paid them back for what you've borrowed. Considering that I paid off part of my credit card with reward points, It could even be seen as worse to go this way as a customer.
Mokalus of Borg
PS - I can't find a link to the current scheme being advertised on Australian television.
PPS - That's how much attention I pay: I can't remember which bank is offering it.
3 comments:
the bank in questions was the one whose name comprises of the initials of Australia and New Zealand.
Trust the guy in advertising to know this crap!
I think it depends on what you're like as a person financially.
Some people are great at paying off their credit card as soon as they can. These are the people for whom the spending system works.
Others (like me) are not. The balance reward system really appeals to me, because that gives me a 'bonus' reason to pay off my debt - other than not incurring more interest. I have to stop using my card after a while, because I'm not good at paying back what I've spent on a fortnightly or monthly basis. But if the impetus is that repaying it means I get extras, then you can bet that I'll be making bigger, more frequent repayments.
(I've actually been thinking about looking into this!)
You're right - it is the same thing bar the timing, but I think it will appeal to different people
Thanks, Miv. I knew someone would know who was offering it.
@Erin: I grant that there's a psychological difference between the two, and that obviously has to be where the appeal lies.
Now I'm wondering if both schemes give you bonuses for the interest the bank charges. That might make them a bit different.
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