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Mike Hohnen

Coaching for personal growth, change and development

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Plastic That Pays Back — Mar. 15, 2004

April 21, 2016By Mike Hohnen

Credit card issuers know that you, as a consumer, are more loyal to brands like Avon, Barnes & Noble and Amazon than you’ll ever be to them. The first offer of a lower interest rate that lands in your mailbox, and you’re likely to be off – which is why card companies are increasingly hitching their stars to other brands. To win your favor, they’re offering to help you buy more of your favorite products. Is there a downside to these deals?

The specifics of co-branded cards vary quite a bit, but generally, for each dollar you charge, you receive a point. Points can be redeemed at affiliated companies – for lattes at Starbucks, chinos at the Gap, flights on Delta. The number of accounts offering rewards jumped from 35 million to 56 million last year, according to the industry-tracking Nilson Report. And the offers keep rolling in. Bank One and Visa launched a card last month with Sony; American Express added to its program last week a company called Space Adventures, which sells “space flight experiences,” including airplane rides that simulate weightlessness. According to Synovate, a market-research firm, U.S. households received 263 million pitches for co-branded credit cards in the last quarter of 2003, up 35% from the same period the year before. Many of these cards not only give you redeemable points every time you charge, but also give you bonus points when you spend at affiliated companies.
https://www.time.com/time/magazine/article/0,9171,1101040315-598542,00.html

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