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Credit card companies are downright sneaky. They entice you with tens of thousands of rewards points, then they pull back the curtain to reveal 23% interest, a sky-high annual fee, and blackout dates galore.
And with the Christmas shopping season upon us, these companies are ready to reel you in and drown you in debt. Too bad for them—you’re about to know all their tricks.
Here’s our list of the seven dirtiest marketing tactics credit card companies use at Christmas (and all year long, for that matter). Don’t fall for them!
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1. Reward points
During the holidays, credit card companies strategically change their rotating bonus point categories to things like Amazon and department stores so you’ll spend more. What they don’t advertise is that a third of those rewards go unredeemed each year, according to a survey by marketing firm Colloquy.
2. Zero-interest introductory rate
No interest for 18 months may sound like a great way to finance your flat screen, but it’s not the whole story. If you accidentally join the ranks of the 52% of Americans who don’t always pay their balance in full each month, get ready to fork over hundreds of dollars in built-up interest. Ouch.
3. No annual fee your first year
Guess what happens after a year? A fee! That’s what happens. Think you’ll just cancel before then? Credit card companies pay entire teams of people to keep you from canceling: But you’ll lose all your precious points! You’ll ding your credit score! We’ll give you more points! They’re good at it.
Related: The Number-One Way to Improve Your Credit Score
4. Rewarding donations
No time to use your rewards? No problem. You can donate them to charity. Isn’t that nice? We have a nicer idea. Save your money and give that charity a big, fat check. They’ll like that a lot more.
5. Discounted purchases
When you open store-branded cards, you may get $30 off, 15–20% off, or free shipping. That’s chump change to credit card companies. They’re waiting for you to slip up big time—long after that discounted sweater sinks to the back of your closet.
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6. Cash back
We like cash around here. But this is one instance where we don’t recommend it. You have to spend thousands to get a measly $100 cash. Oh, and it’s probably just a credit applied to your account, which is about enough to cover your annual fee. How about you just keep your cash instead?
Related: 3 Signs You’re Giving Your Credit Too Much Credit
7. Sign-up incentives
Earn double miles in your first year! Get 25,000 points after $3,000 of spending in your first three months! Sound familiar? Credit card companies know if they can distract you with some attractive bait, they can hook you for life. Don’t be a guppy.
Cash is better!
Stay away from these marketing tricks this Christmas. Instead, make a budget for your money and use cash for everything you buy. When you do, you’ll get the gift of staying in control and sticking it to the sneaky credit card companies. Talk about rewarding.
Create your budget in less than 10 minutes with a free EveryDollar account!