Does having a reward/cashback card make you spend more?

zoe55

Hello!

Long time lurker, first time poster!

Regarding the title, I'm genuinely curious. About a year ago, I was accepted for a Barclaycard Freedom Rewards. The points system is a bit pants. You need loads to get a £5 voucher. Anyway, I just figured I'd use it for all spend. What I didn't realise was that my spend was increasing more and more each month. Every time I saw my Freedom points increase, I'd spend more on my card and justify purchases by thinking, 'ooh, I'll get me points.'

A year later and my closet is bursting and my clothes are all telling me I've dined out one times too many. When the thought first occurred to me, I thought 'oh good. I can purchase a gym membership with my Barclaycard and get points' and then I realised how wrong my thinking was and that I'd better get rid of the card before I do any more damage.

I have one other credit card and I have never abused it the way I have this one. I think the promise of points encourages me to spend more.

I want to go away to Europe for a week's break later on in the year and I'm already thinking about the ton of points I'll accumulate by booking my hotel and flights through lastminute.com through the Barclaycard Freedom Rewards store. But then I think I definitely need to get rid of the card now. (At least I always clear it in full - which is the ONLY good thing about this sorry post!)

Does anybody else have this problem? Or am I just an idiot?

sinizterguy

Does it make me put more of spend on the relevant card - Yes

Does it actually affect what and how much I spend - No

elsien

I have a cashback card that pays money rather than points.
However when I'm spending on it, I don't think about the cashback, I just decide whether it's in budget or not. The same as when I'm shopping I think about the best value rather than the amount of tesco or nectar points.
Any points or cashback are miniscule when compared to the amount you're spending, so if it's encouraging you to spend more perhaps you need a different card with no "perks."

Mav6215

I have 3 credit cards but mainly use two of them: One has a 33 month interest-free period and the other has cash back.

I don't purchase any more than I did before getting the cash back card but I now use it for all purchases. I then put the money I would have spent from my bank account into a savings account then pay off the balance in full once the statement is produced. Any larger purchases that I wish to spread over a few months I transfer to one of the other two (one has 12 month interest free).

I also use cash back sites as often as I can.

The cash backs are bonuses which get put into a seperate savings account which, when builds up enough, I use to purchase another £50 of Premium Bonds.

davidsuffolk

I put EVERYTHING I can (even a couple of £ at a shop) on my card and for that I get (got if the thread about cancellation is correct) a couple of hundred back every year. I don't buy anything beyond what I would have bought so my answer is no, it doesn't make me spend more.

dealer_wins

Ah the days when you could get 10000 miles/points a week for gambling transactions. Those were the days

zoe55

elsien wrote: »

I have a cashback card that pays money rather than points.
However when I'm spending on it, I don't think about the cashback, I just decide whether it's in budget or not. The same as when I'm shopping I think about the best value rather than the amount of tesco or nectar points.
Any points or cashback are miniscule when compared to the amount you're spending, so if it's encouraging you to spend more perhaps you need a different card with no "perks."

This is definitely true. I think I'll close my Barclaycard and stick to my normal, no perks TSB one.

zoe55

Mav6215 wrote: »

I have 3 credit cards but mainly use two of them: One has a 33 month interest-free period and the other has cash back.

I don't purchase any more than I did before getting the cash back card but I now use it for all purchases. I then put the money I would have spent from my bank account into a savings account then pay off the balance in full once the statement is produced. Any larger purchases that I wish to spread over a few months I transfer to one of the other two (one has 12 month interest free).

I also use cash back sites as often as I can.

The cash backs are bonuses which get put into a seperate savings account which, when builds up enough, I use to purchase another £50 of Premium Bonds.

That really does sound like a good idea. When I applied for the card, my plans were pretty sensible. I'm not sure what happened.

Before I got the card, I used to stick well within my budget.

Cashback sites are a good idea. Although now I'm worried, I'll start purchasing more and thinking, oh it's okay since I'm doing it via a cashback site. I have got to get out of that kind of thinking!

zoe55

davidsuffolk wrote: »

I put EVERYTHING I can (even a couple of £ at a shop) on my card and for that I get (got if the thread about cancellation is correct) a couple of hundred back every year. I don't buy anything beyond what I would have bought so my answer is no, it doesn't make me spend more.

That was my plan to begin with. Put all my spending on the card and only to use it for my normal spend. No extras for the sake of points. Now, I'm NOT blaming Barclaycard for this, but every so often they'll advertise 'get X amount of points per £1' via their email newsletters and I always seem to save thinking yes, I DO need a new coffee maker from Argos and a new coat from Debenhams!

prowla

I have a Tesco credit card, which I use in preference to other payment forms.
However, it doesn't influence where I shop or what I buy.
I have a number of loyalty cards, which I use if I go to the particular shop.

redpete

zoe55 wrote: »

Does anybody else have this problem?

Not me.

Or am I just an idiot?

Errrr, yes.