If you think you are getting rich by getting 3% back on your credit card purchases think again.
This is directly from an article called “Why Get A Merchant Account” by a merchant processor named Approved Payments. See what those who sell credit card processing are saying about you.
- Consumers tend to spend more when using a credit card than when using cash. There is no imposed spending limit like there is with cash, so it’s easier to keep spending.
- Accepting credit cards help customers make faster buying decisions. Impulse buys are more likely with credit cards than with cash or checks.
It is common knowledge that consumers spend between 12% – 30% more when they use a credit cards Vs cash. The exact percentage cited varies depending on the purchase type, but the fact that you will spend more remains the same.
If you were getting $400 a year back on your cash back credit card, based upon 3% back on all purchases, that would mean you are charging roughly $13,333 dollars per year on your credit card. An overspend of even just 12% is $1600.
I don’t know about you, but I have no desire to unconsciously spend $1600 to get $400 of my own money back at the end of the year.
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