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FACT: Those reward miles from your credit cards are NOT WORTH IT!

There are so many credit card companies out there that promise you a nice return on your purchases in the form of miles or points. Most of these miles can be converted into rewards that you can use towards flights and other goodies like cash back. However, most of the time, these bonuses are NOT worth it for getting the card, and let me tell you why in today's blog post.

Credit card companies seem to have gotten ridiculously good at baiting people into signing up for their programs, and one of the ways is with these so called "miles". Sometimes they'll use enticing one-time offers like a one time bonus of 40,000 miles for spending $3000 on the card or something along that line.

However, the use of the word "miles" is EXTREMELY misleading. They could have called it anything else, like "jarbles", "points", or "warble snarbles". They do not convert to actual miles that you can fly for. If they did, the credit card companies would be losing money on these cards. Even the most generous rewards program offers no more than 2% ROI for the purchases you make, and those usually come with lots of restrictions on what you can use the points for and how much annual fee you have to pay.

Another reason these points are not worth it is because usually cards that reward you in points will charge something called an annual fee. That means every year you'll be paying around $80 just for the privilege of using the cards, and most of the time, those reward miles do not even add up to that much unless you spend a ridiculous amount each year. Just another way to draw in unsuspecting customers.

So if you earned $200 in miles, and paid $250 in annual fees, was that worth it? It would have been better to just use your debit card or a credit card that does not offer rewards and carries no annual fees.

Finally, the flexibility in how you can use these points makes it more likely that people do not bother cashing in their points. If they are called "miles" then most of the time you can only use them towards flights, and if you don't, then you get a ridiculously low return on your points, something around 1% or less per dollar spent.

You may be wondering how companies can even afford these programs. The fact is, merchants have to pay for the privilege of accepting these cards, so chances are you are already paying for these points to begin with, since the merchant likely added the costs of using the credit card onto their items' prices.

These are just some of the reasons why these so called points are not worth getting a credit card, but there are a myriad of other reasons as well. The only time I would recommend getting a credit card is if you are extremely responsible, set the payment plan to automatic payments, and you're using the credit card as a method of obtaining a better credit score. Finally, you may consider a credit card for their fraud insurance program and the fact that you're not liable for purchases you didn't make in case of identity theft. These are the only two reasons I would get a credit card, and not because they offer some ridiculously enticing reward program that is barely worth anything.

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