Reward Card Shoppers, Beware!

When you see words like "details inside" or those pesky little asterisks tied to credit card offers, it's important to understand exactly what you're getting.

Money & Credit

Reward Card Shoppers, Beware!

Are you being bombarded with credit card offers?  I am.  Last week alone, I counted six credit card mailings I received at home, and countless more since the beginning of the year. It's clear as the economy turns the corner that banks and financial institutions are once again, ready to extend you a credit card offer you can't refuse.

Here’s a sample of the offers I recently received …

“15,000 Membership Rewards … $0 introductory annual fee for the first year.”

“3 bonus points per dollar spent on selected purchases.*”

“Earn 30,000 bonus points … see details inside.”

“1% cash back everywhere, every time…2% cash back on groceries…3% cash back on gas.  See inside for details.”

When you see words like “details inside” or those pesky little asterisks tied to credit card offers, it’s important to beware of what you’re actually getting to be sure it's what you think it is.

Most rewards card offers you receive never show you exactly what you can get for the points you earn in the mailing. They typically wait until the card is issued and then include a “reward chart” showing the value of your points.  What you'll sometimes see is the redemption levels required to reach certain rewards can be much higher and your points may not be worth as much as you'd hoped.

Recently, we saw an offer for 3 points on all gas purchases.  When looking closer at the disclosure of the offer, there was a requirement to “opt in” to the promotion and it was tied to a one month window of time to earn the points.

We also see no annual fee promoted all the time.  Whereas the one described above is pretty clear it’s “$0 introductory annual fee for the first year” many cards aren’t as upfront and you’ll end up seeing fees of up to $85 or more the second year and beyond.

We encourage our policyholder to look closely at offers and beware of what appears to be too good to be true – it usually is.

The information in the NCMIC Learning Center is offered solely for general information and educational purposes. It is not offered as, nor does it represent, legal or professional advice. Neither does this information constitute a guideline, practice parameter or standard of care. You should not act or rely upon this information without seeking the advice of an attorney familiar with the specific legal requirements of the state(s) in which you practice. If there is a discrepancy between the site and an insurance policy you have with NCMIC, the policy will prevail.