Am I going to Hell for using my credit card?

June 11, 2009 · 13 comments

I’ve blogged about it many times before so I will try to minimize redundancy. I use my credit card for every purchase I make . I do this for two reasons 1) It consolidates all my payments in to one big payment 2) I earn reward miles for every dollar I spend. Not too long ago I wrote about the perks of credit card incentives . Well a month later, I’m wondering if I am going to hell for taking advantage of these perks.

I’ve heard it argued that it is unethical to take advantage of CC perks. Why? Because the only reason the banks can offer these sweet deals is because they are charging the bajeezez out of those that are only making minimum payments. As one that takes advantage of my airline offers I feel obligated to lay my case for why using incentives is okay.

1) I have no internal debate as to wether or not I am hurting someone else by using these incentives. When I was in high school I cheated on a few tests (shhhh don’t tell anyone). When I was cheating I had that internal conflict that went something like “Ninja, you know this is wrong…Why are you doing this?” Obviously I told the voice of reason to shut it and I cheated anyways. In that situation I felt that what I was doing was wrong, but ignored those feelings. I have never felt like I was doing something wrong by cashing in my airline miles.

2) There are two types of credit card owners out there. Those that pay their bills in full each month, and those that don’t. We are both doing the same thing though, we borrow money with an intention to pay it back. Why should I feel bad about being rewarded for being a responsible borrower? The answer: I shouldn’t. As long as I follow through on my end of the deal, Why can’t I be rewarded?

3) At the end of the day, let’s be honest…it’s the credit card companies that are going to hell. They make a ton of money from sketchy lending, jacking up interest rates, and charging people five buttloads of money in late fees. Think about it like this. I’m actually screwing the banks by paying my balance in full each month. All I do is cost them money (via my redeemed rewards). They get no interest charges or late fees from me. Either way the banks are getting a crapload of money, so this is just one way it’s coming back to the people.

So peeps what’s your call on this two-sided debate? Am I going to hell? I see arguments from both sides, but as of this moment don’t feel compelled to change my ways.

p.s. for further education on how the banks bring in the bling check out this post by The Weakonomist.

{ 13 comments }

1 J. Money

if you're going to hell, save a seat for me! i get why people hate credit cards so much, but it certainly doesn't hurt anyone by using them to your advantage. controlling THEM instead of having them control YOU is key – you get it right and you're golden. i'll continue using my cards until they don't exist anymore, they just make my life so much easier.

2 the weakonomist

I don't want to deep-link into my own blog from this post, so I'll just talk. Earlier this week I wrote about credit card companies and how they make money.

Those that argue it's unethical to take advantage of rewards don't understand the credit card game.

It's true banks make billions on interest and fees t you, but they also make money on EVERY SINGLE TRANSACTION. Citi, Chase, Wells, BofA, and everyone else get a small cut of every transaction. If for example you bought a $10 bottle of wine with your credit card, the store only receives $9.80. That's because the credit card companies charge the store for the transaction. That $0.20 is split between Visa and the bank. This adds up.

They offer incentives because they want you to go out and BUY STUFF. It's just gravy if you don't pay your balance off each month.

3 Punch Debt In The Face

@ J Money- I guess it will be me, you, and Rosie O'Donell sitting next to each other in the furnace. PF party in hell?

@ Weakonomist- Good point mister, and I totally don't care if you link to your own post. It should prove as a good read. You don't have to worry about me being psycho and deleting your comment if there is a relevant link in it. Shoot I'll even include the link to your article in my post :)

4 the weakonomist

Per PunchDebt's request I've included the URL to my post below:

http://weakonomics.com/2009/06/09/weakon-153-how-credit-card-companies-make-money/

5 SJ

Yeap, the weakonomist post is pretty entertaining =)

Also… by that logic anything you do that is subsidized by other consumers is bad.
Cheap airplane tix? Cheap phone service? Matinee pricing? etc. etc…

Unless of course you argue that credit is bad period.

6 Dr. Faith

Both you and the consumer who are getting ass-raped in credit card fees are both getting the perks of miles and the like, so I wouldn't feel too bad about it at all.

7 Punch Debt In The Face

@ SJ- I agree, I have just heard people say that people that incentives are a "reverse robin hood" principle, that it is the poor that are subsidizing those that can afford to pay. I don't agree with it, but that's the main argument I've heard

@ Faith- Touche, I like the way you think, minus the booty raping, don't want to think about that ever….haha

8 Anonymous

you're so hott.

9 Kali

I guess I'm going to hell too. If a company wants to hand me money back on things I was already going to buy, then what kind of moron would I be to refuse it?

10 ashley

Hmmm I actually never thought of it that way before. It makes sense though. I suppose it is kind of shitty for the people who don't pay their whole balance, and I don't feel bad for the people who won't pay it off. But I do feel really bad for the people who CAN'T pay it off for whatever reason- medical bills, layoffs, etc. It's no good to be taking advantage of them. When push comes to shove though, I'm not going to stop using my reward points. :-(

11 Punch Debt In The Face

@ Kali- You can join J Money and I, we'll save ya a seat next to Hitler.

@ Ashley- I agree, the only potential moral conflict comes from the people that put forth their best effort to make payments but the fees and interest never allow them to get ahead.

12 Simon

I actually got a letter from bank of america for something similar.

I was paying off the balance daily. . .the really hate that.

I say if you are comfortable using the cards and what you are doing is perfectly legal, go for it!

13 Anonymous

Looks like I'm going to hell too. I don't feel bad for taking advantage of credit card offers, or most corporations in general. As long as I feel like I'm being honest, I don't see why I shouldn't take advantage of every opportunity that I can. Especially when the same corporations are taking advantage of every consumer that they can.

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