Economists are alarmed, and that sort of alarm often translates into the Federal Government stepping in to regulate.
We're not taking on more debt, honest. We're only shifting the deck chairs on our sinking personal finances.
Credit cards offering cash-back rewards are growing in popularity because...it's obvious. You know you're paying a premium to use the credit card and getting a piece of it back is enticement enough.
But when the economists look at the total debt picture, they see numbers climbing and they become alarmed.
Please don't cause a fuss. There are a lot of us who understand that credit, rather than cash, will yield a small financial reward and we don't want to lose out because some people don't realize how credit cards actually work to benefit the bank that issues them.
Vendors pay a fee to the bank for the right to accept the card, and it means more business for them. Whether you charge or pay cash, that fee is passed on to you in the price of the item. For you to use your credit card instead of writing a check makes no difference.
You're paying the same price, and when you pay off your balance in full each month, you're in the same place you'd be if you didn't charge.
Add in a cash-back bonus for using credit and you're a few steps ahead of the game. The groceries or socks you purchased are a little bit cheaper, thanks to the rebate, and you're no worse off.
Should some well-meaning politician be stirred to act, those rebates could be taken away and those who use their cards wisely would get screwed over so that the unaware might be spared from their own ignorance.
Yes, indeed, there are people who don't realize that making a monthly minimum payment will never get the balance to zero.
But for those of us who feel like we're gaming the system by not paying a dime in interest fees while merrily collecting our puny cash-back bonus? Can't we go on moving the deck chairs so that we can pretend we're making headway?