Debt Help Today: Credit Card Debt Piling Up Due to Bum Rewards Deals

June 2008

Record numbers of Americans are pursuing debt help today, based most often on the growing burden of credit card debt. But even as we struggle to learn the lessons of being burned by credit card companies, many consumers are signing up for cards based on sneaky or useless rewards programs.

Like the airline miles that so often frustrate consumers, rewards programs are usually just another way to land you in credit card debt. They make credit card applications much more complicated with rules and regulations often kept in very fine print.

Of those individuals seeking debt help, there's no way to know how many got into trouble thinking that their rewards program was a good deal. But we do know that 85% of all U.S. households participate in at least one rewards program. Sadly, most people find that redeeming their rewards can be complicated due to restrictions to certain brands, certain products, or certain time frames.

And then there are the things they don't tell you. Too often, credit cards that come with an attractive rewards program also include a higher-than-average interest rate, and/or annual fee. These tend to negate any benefits of the rewards program, and end up leading many Americans into credit card debt based on the best intentions.

And worst of all, more than 41% of consumers don't end up using the very rewards that led them to use that credit card in the first place.

If you're looking for debt help, avoid any credit card that offers special "rewards" in exchange for balance transfers or use of the card. Too often it's just one more means of getting your money out of our pocket, and into the hands of hungry lenders.