Dave Ramsey: Why He’s Against Credit Card Points and Airline Miles
They seem like good ideas on the surface — who hasn’t gotten excited about earning credit card points or airline miles?
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However, not everyone thinks those points and miles are really good ideas for you and your money. According to Dave Ramsey from Ramsey Solutions, here are some of the reasons why credit card points and airline miles may not be for the best.
Credit Card Points
According to Ramsey, the odds aren’t in your favor when it comes to credit card points.
If you’ve ever been part of a program where you earn credit card points, you probably know it can take a lot of points to cash in for prizes or money back. And guess what — the credit card companies know this as well.
According to Ramsey, “…They know if they can convince you to play the points game, you’re more likely to rack up a higher balance and pay them more in credit card interest.”
While you can earn about one point per dollar spent, Ramsey said you’ll probably find that redemption means one point equals one penny. And, while you can request a mailed check for your cash back, most of the time it just goes toward your current card balance. So you’re likely to keep spending more with your card.
Airline Miles
Ramsey said it’s a similar situation when it comes to airline miles. You need to travel a lot to earn these rewards. Again, every dollar you spend equals one travel mile. But when you’re trying to redeem them, each mile is worth maybe a penny.
There are some restrictions that make those airline miles seem less appealing. For starters, your travel miles aren’t likely to cover taxes and fees. Some airlines also only reserve a certain number of seats on each plane for travelers with travel miles. In addition, there are probably blackout travel dates.
According to Ramsey, who advises against credit card points and airline miles, “No one ever got rich off credit card points.”
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