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

Nebulous2

I definitely don't spend more because I have a cashback card.

I might spend more on it though.

Chrysalis

in my case no.

I was considering using my credit card for my tesco shopping as I get a point for every £4 spent on it, but when someone let me know it was a bad idea (as balance transfer is on it), I decided it was no way that was going to make me use the card.

The normal clubcard points also got halved a couple of years back. So even the normal clubcard accrue rate is now very low.

enthusiasticsaver

I understand where you are coming from and I put all my spends on credit cards for the rewards - petrol, department stores, supermarket spends all on my Santander 123 credit card and everything else on my John Lewis partnership card for the cashback in waitrose vouchers. If you were not budgeting I could see it could be quite easy to be sucked into spending on cards for rewards and in fact that is what the card issuers want you to do.


I have a spending tracker app on my phone and every spend I make, whether paid in cash, credit card or debit card is recorded on my budget for the month I spend it which obviously for credit card spends is actually the month before I pay it off in full. I won't pay credit card fees so I use my debit card for travellodge, theatre tickets etc and I do not spend on a credit card anything which is not actually needed. If ever I shop for clothes - maybe about three times a year I plan beforehand what I am going to need for the next four or five months. It requires discipline and some people may say it takes the fun out of shopping but it works for me.

B19JON

I must admit, when I got my first ever cashback card (BC High5) I went a little spending crazy. I was buying unnecessary things & putting all mine, plus friends shopping, restaurants & flights through the card. I think i accumulated roughly £450 worth of cashback. Always paid back in full and sometimes worrying seeing a 3k statement at the end of the month. I noticed certain people on here in the £700 mark and just wanted to see how much I could get.

Then I went onto the Aqua 3% CB. That was fun, because the limit was £300 and I had to juggle that pretty well. This card actually made me slow down my spend.

I current have an amex CB and Gold card. I often buy things that I don't actually want/need purely because Amex gives you a lot of offers. Never even heard of places like Achica before i got an amex- but spend £50 get £25 back offer is a lovely bargain. So I get suckered in

prowla

Chrysalis wrote: »

in my case no.

I was considering using my credit card for my tesco shopping as I get a point for every £4 spent on it, but when someone let me know it was a bad idea (as balance transfer is on it), I decided it was no way that was going to make me use the card.

The normal clubcard points also got halved a couple of years back. So even the normal clubcard accrue rate is now very low.

Why is it a bad idea?

YorkshireBoy

prowla wrote: »

Why is it a bad idea?

Best to keep purchases and 0% BTs on separate cards, as you won't be able to avoid paying interest on purchases if you don't completely clear the entire balance each month.

agrinnall

zoe55 wrote: »

Put all my spending on the card and only to use it for my normal spend.

This is the only sensible way to use a cashback card - if you wouldn't have bought it anyway, don't buy it on a cashback card either.

andyfromotley

There is a more general problem in that paying buy CC (or in some studies DC too) lead toward a tendency to spend more, than when using cash. The main theory behind this is that handing over cash causes a 'pain' type response in our brains that is absent when using cards and of course you are limited by the amount of cash you have on you.

There is a nice round up of leading studies here
https://www.nerdwallet.com/blog/tips/credit-cards-make-you-spend-more/

I suppose its a similar area that deals with spending more to gain more 'rewards'

noelphobic

enthusiasticsaver wrote: »

I
I have a spending tracker app on my phone and every spend I make, whether paid in cash, credit card or debit card is recorded on my budget for the month I spend it which obviously for credit card spends is actually the month before I pay it off in full. I won't pay credit card fees so I use my debit card for travellodge, theatre tickets etc and I do not spend on a credit card anything which is not actually needed. If ever I shop for clothes - maybe about three times a year I plan beforehand what I am going to need for the next four or five months. It requires discipline and some people may say it takes the fun out of shopping but it works for me.

What is the app called please? It sounds like something I'd like to try.

I have the Luma credit card which gives me 4% cash back but just on supermarket and petrol spends up to the value of £225 per month. I usually use that just for the supermarket, Santander 123 for petrol and train tickets and my Marks & Spencer card for everything else.

Although I am pretty good with money I do sometimes think I would spend less if I paid cash for everything. That wouldn't apply to petrol or train tickets though. I have a fairly long commute for my paid job and also do some voluntary work.

20aday

Do I spend more than I would using cash by charging my Reward credit card?

No, I don't... I merely put onto them (be it Sainsbury's, Tesco or Lloyds) what I'd be spending and paying for out of my weekly budget to accrue points to turn into vouchers etc.