Who doesn’t like to be rewarded? We all like to be rewarded for a job well done, for our good ideas, for our initiative. But sometimes it doesn’t pay to be rewarded, particularly when it comes to spending money in order to gain the reward.
Credit card companies need to remain competitive in an increasingly competitive market so they must continually provide customers with benefits that outdo their competition and retain the business of the good customers. It is this reason that reward cards have become as popular as they have in recent years. The credit card companies have moved beyond the traditional airline miles and into a whole new realm of rewards programs. Some examples include straight cash back, entertainment-based rewards, and rewards for paying at the gas pump. Besides the cash back rewards, most programs allow you to accumulate points based on the total amount of your purchases on the credit card within the month. As the points accumulate, credit card holders can exchange these points for other merchandise, discounts on travel, or special deals created exclusively for card holders.
The Rewards Pros
In many cases, the rewards programs can be beneficial to the consumer who gets cash back just for buying gasoline or groceries as they normally would, especially when the deal involves cash back being reapplied to your monthly credit card balance or delivered in the form of a check. With the abundance of credit card rewards program, it is highly recommended 
that you conduct your own research on the various card offers before making a commitment to a card in order to get the card that will suit and benefit your particular lifestyle and spending habits.
The Rewards Cons
While finding a credit card rewards program that works for you is great, it can also be dangerous. Some people go about using their rewards card in the wrong way and simply shop till they drop just to get the discounts and the deals. Unfortunately, rewards program or not, a credit card is still a credit card and as a card holder, you are still held responsible for its use. Spending thousands just to save a few bucks or get rewards that are no where close financially to what you have spent, is a recipe for financial disaster. No rewards program is worth getting yourself in debt.
In order to keep a handle on your rewards credit, you need to start out with a plan. You should incorporate into your plan a reasonable budget and a commitment to spending only what you can afford in cash when using your credit card. If you can not pay off the balance due each month, you should not be making those purchases. In fact, all purchases on your credit card should be thought of more like cash purchases. If you choose to use your rewards card to earn the rewards, make sure you set the cash aside each and every time so you will always have the resources to pay back your debt on a monthly basis.
Spend Smartly
You also need to remember that no matter how good the rewards program seems, going over your credit limit will certainly overshadow any benefit you are getting from the program. Going over your credit limit can certainly cause chaos in your financial world. You will be faced with over the limit charges and fees that escalate quickly, as well as cause damage to your credit history. Overspending is a sign you are not being responsible with your credit card use. Even having a credit card with a balance close to being “maxed out”, leaves you vulnerable for a lower credit score and the potential for exceeding your limits of credit.
As with all financial matters, proper management is key to staying clear of debt. Credit card debt is certainly no exception. Using plastic is not the same as spending free money. There is no reward that will make up for the fact you are losing thousands of dollars each year in fees and finances charges, should you use your card solely for the rewards it offers.
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