Credit Cards and cash back?

Is anyone falling for this sales pitch?

I just want to know if anyone is falling for this cash back sales pitch the credit card companies are using? Apparently credit card use is declining because they are offering this ridiculously small amount of money for using your credit card.

Some are offering one percent, two percent, and three percent. Even if they were offering 10 percent it would be a rip off and they are not.

In case some of you are bad at math one percent of a dollar is one cent. One percent of 100 dollars is one dollar and so on. Even one percent of 1000 dollars would only be 10 dollars. Of course two percent of a dollar is two cents, two percent of 100 dollars would be two dollars and you get the idea. So if this seems like a good deal to you then you need to cut up your credit cards.

Interests rates are astronomical and no longer tax deductible.

Danger Will Robinson, danger. (A reference to Lost in Space.) Some credit cards charge as much as 30 percent. That means depending on your balance they could be charging you 30, 40, or 50 dollars a month in interest or even MORE. This is a month after month charge while that generous one, two or three percent is a ONE TIME cash back on that purchase and will get charged interest until your balance is paid off. HELLO!!!

So if you are paying 50 dollars a month and that is month after month then you will pay 600 dollars for the year give or take a few pennies. Most of your payment will go to interest especially if you make the minimum payment every month. So, again hypothetically if you make a 50 dollar payment 30 dollars will go to interest and 20 dollars to the unpaid balance. So if you have a 1000 dollar balance and you are applying 20 dollars of your 50 dollar payment then your balance goes from 1000 dollars to 980 dollars and the bank keeps the 30 dollars  out of your 50 dollar payment. For the year you pay off 240 dollars of your 1000 dollar balance making your balance 760 dollars while they keep 360 dollars out of your 12 payments. These are round numbers just for simplicity and you are probably paying more but that is basically how it works.

Hypothetically if you spent 1000 dollars and got three percent cash back that would be 30 dollars one time for that purchase. Then the interest kicks in and if they are charging you that same 50 dollars a month for 12 months or more you get charged 600 dollars in interest and they gave you that GENEROUS (not) three percent or 30 dollars. So how is them giving you 30 dollars ONE TIME on that purchase and they charge you 600 dollars over a year and more interest if it goes longer a good deal? IT IS NOT.

Years ago you could deduct the credit card interest from your taxes if you itemized. Then your wonderful elected representatives decided to screw over their constituents and change the law so it was no longer tax deductible. Not sure who benefitted from this change but it wasn’t you and I. Our elected officials probably accepted a bribe or some graft or a kickback from some lobbyists or they just decided the government needed more money to spend. And remember they have run a deficit since the country began. They are irresponsible and can’t balance a budget if their life depended on it.

Credit cards are not needed if you save.

I have heard a lot of people say you need a credit card for emergencies. You do not. What you need is savings in a bank in case of emergencies and there is the rub. A lot of people live paycheck to paycheck because of that very credit card interest on that big balance people already have.

The average American household with at least one credit card has nearly $15,950 in credit-card debt (in 2012), according to, and the average interest rate runs in the mid-to high teens at any given time. And this figure hasn’t changed much right up to 2016.
Credit bureaus force you to have credit cards for a credit score.
This is bullshit. Your score should be the same as the next person whether you have three references or 30 references. I raised my kids to stay away from credit cards at all costs so it took some time to build credit for them. Credit cards are too easy to use.
One of the problems in America is the credit bureaus give you a low score for just about anything and especially if you don’t have a lot of credit references on your report. i.e. numerous credit cards, loans etc. etc. but mostly credit cards because what else is there.
So, I am not a credit expert just a person like you that at one time was in debt. I am not a banker. I just think that these credit card companies think people are stupid and some people are and they fall for this pitch.

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20 year veteran of the military. Born in Pennsylvania, grew up in Florida and retired in Florida. I have had two wives, and four children. Love the sunshine, the beach and fresh air. I really hate the cold and snow. Love a good rare steak, baked potato with butter and sour cream. I am addicted to pasta and especially fresh bread from Publix.

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