West Elm, an upscale retail store featuring contemporary furniture designs and housewares, is offering you 10% back in rewards with their exclusive credit card. For every $250 you spend, you’ll receive $25 in rewards
– OR –
If you spend at least $750, you can opt for no interest if paid in full within 12 months. You can’t even get the best of both offers.
Now let’s look at the fine print. Standard variable APR of 19.00% to 22.80% or a APR of 26.99% – depending on when you opened your account – with no additional details or explanation. Consider that even a person with the absolute best credit score ever would get the lowest possible rate of 19.00%.
So, add 20% to their designer prices for each item bought, which makes your 10% “reward” completely nonexistent. Why bother. Instead, just pay with cash.
“Cash in on life’s essentials” implores the envelop even before the offer is opened.
On their Cash Reward’s Visa credit card, Bank of America generously offers 1% cash back everywhere, 2% cash back at grocery stores and 3% cash back at gas stations. Best part, there is no annual fee.
But this stellar offer is only applicable on the first $1,500 spent per quarter. So if you spend $1,500 on just gas in a quarter, you’d receive $45 back. That’s the maximum cash reward that can be earned in a three-month span. Sounds like a lot of work for a mere $45 every 90 days, assuming only gas is bought on the card.
However, if you carry a $1,000 revolving balance on the card generating interest at the Cash Rewards Visa’s lowest interest rate of 18.99% for that same 90-day period, you’d pay $48 in interest, accounting for the daily periodic rate and compounding interest. When the average credit card debt for a credit card holder in the U.S. is $5,047, it’s not unreasonable to assuming $1,000 revolving balance in this scenario.
The point is very few will cash in on such reward cards. In fact, the credit card companies expect many people to never break even on these offers, allowing them to dish out diminutive cash rewards to the few who can manage paying off their balance monthly. While the only one who is truly cashing in on this scenarios is Bank of America CEO, Brian Moynihan, who received a $12.1 million pay package in 2012 (and all the other BofA execs).
Or at least someone responded from Alec Baldwin’s foundation. Yes, I think it’s commendable that Alec Baldwin has a foundation that supports “the arts and artists, amateur and professional”. However, as I stated in my reply to the pictured tweet, Capital One is making way more than $11 million on their Venture accounts, and that is money that should be in the pockets of American families and not those of overpaid bank CEO’s. In fact, MSN money deemed Capital One’s CEO, Richard Fairbanks, the most overpaid bank CEO of 2012.
I’m fed up with the countless credit card offers I receive…daily. I am spending one year documenting all the offers I receive to demonstrate the severity of the problem and how it relates to the larger American credit card debt crisis.
My goals are to highlight the fine print in these offers and ideally educate others regarding the danger of credit cards and the financial havoc they can wreak.