Rewards Programs: Advantageous But You Need to Pay for the Price
Canadians are fond of getting credit card rewards. It can be very enticing for a cardholder to make use of the card in every purchase given that rewards will be collected. You must save your points until the end of the year comes. By that time you can then have enough points to have it exchanged for an expensive gift. Maybe you can get a free family vacation which is worth thousands. Aside from the free travel, your rewards credit cards can give you free groceries as well as other products and services.
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With an average consumer, gifts coming from the rewards credit cards come out as free. However, when it comes down to it, it is not actually free. The people who truly pay are the retailers through the increased credit card fees, though there are not many benefits to do so. For instance, a small business could eventually be paying more than $10,000 a month due to the added fees.
Rewards programs are funded by merchant trade off fees firstly being paid by the retailer. However, the cost is then added into the price of the goods that you are buying. Consumers do not appear to be troubled given the fact that they may be paying more for the goods and services they acquire provided that they obtain something free out of it.
Anywhere we go, we are being offered to apply for a credit card for this, a credit card for that. In the end, our wallets will be bursting with rewards credit cards, with limited idea that without them, we may be paying off lower prices in supermarkets.
Based on some research, Canadians are crazy of the rewards programs. There are over 114 million active members of the rewards credit cards programs in Canada. That adds up to four rewards credit cards for each individual. Retailers have sense that they must accept all kinds of credit cards or take the risk of losing the business to anyone else, in spite of the higher costs associated when they will accept rewards credit cards.
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For now, the Consumers Association of Canada resists any action that would lessen the significance of rewards programs, either by putting a cap on interest or fees. Costs are being passed down to consumers by increasing the prices of the products. However, for now, Canadian consumers continue to be unaware of the effects of rewards credit card programs on the costs of the goods and products they pay for provided that they can obtain a free gift in the process.
See Also
Best Credit Cards Canada
Best Balance Transfer Credit Cards Canada
Best Cash Back Credit Cards Canada
Best Capital One Credit Cards Canada
Best MasterCard Credit Cards Canada
Best MBNA Credit Cards Canada
Best Visa Credit Cards Canada
Best Secured Credit Cards Canada
Travel Credit Cards Canada
External Links
Clickz.com
Rewardprograms.org
Businesstravel.about.com
