Why chasing Credit Card points might be a mistake

NBC's Rory O'Neill reports that most people are in debt to the toon of $6,300! So, if you don't pay the bill on time, the points won't matter

Episode Transcript

Speaker 1 (00:00):
Six forty seven in the morning on a Monday, It's
Mike Elliott, Columbus's Mary Morning News. Rory O'Neill, NBC News
Radio on a Monday, Rory. Last week, my wife and
I were booking some summer travel, some summer vacation, and
before I could you know, hit submit or you know,
pay for the flight, She's like, wait a minute, wait
a minute, wait a minute, use this credit card because

(00:22):
we get the points, we get the we get the
airline miles or whatever. That is something that millions of
people do with credit card rewards, but sometimes you got
to think twice about doing that. What's the story.

Speaker 2 (00:33):
Well, yeah, you really do, because you have to pay
the balance off every month otherwise it doesn't work. The
numbers are not in your favor, and a lot of
people don't understand that. And the bank great survey out
this morning find seventy two percent of people card holders
who have those months to month balances, who never pay
off the cards, they're still going after points. So what's

(00:56):
the point of going after one or two percent cash
back or a thousand points that are worth what maybe
ten dollars if you're paying twenty five percent interest, you know,
it makes it. There's no logic.

Speaker 1 (01:10):
There, no, but you've got this sort of I guess,
false sense of saving money or earning something, which is
kind of what they're designed to do to keep you adding,
you know, debt to your credit card balance, and it
doesn't make If you don't pay it off, then the
points are don't mean anything.

Speaker 2 (01:28):
Right, And look, it can be great if you are
someone who travels for work, or maybe you're a sales
guy and you're always taking people out to dinner, whatever
it may be, and if you can pay that bill
off every month, it can be great little perks. A
lot of people I know it's really essentially all their
Christmas shopping is done by the points that they can
earn all year long. But you got to pay the

(01:49):
bill off every month in full, not just the minimum payment,
because otherwise it makes no sense. And keep in mind
the average credit card household in this country is about
six thousand, three hundred dollars. Since your average credit card
interest rates about twenty five percent. By the way, do
you know what your rate is? I bet you don't,

(02:10):
but that's about fifteen hundred bucks a year in interest.
Fifteen hundred dollars in interest poof gone. Yeah, they're going
to give you a free night at the Holiday Inns
if you could be fifteen hundred dollars