5 Ridiculous Excuses For Not Using a Rewards Credit Card

I like to use a rewards credit card whenever possible in order to earn cash back and travel rewards. A credit card is a fast, secure, and convenient way to pay for daily transactions – big or small.

Some people, however, loathe the idea of using credit for any reason and can’t fathom why anyone would use a credit card just to earn a few points.

Here are five ridiculous excuses that I’ve heard from people who refuse to use a rewards credit card:

Rewards Credit Cards have Higher Interest Rates

Indeed, most of the top rewards cards charge interest of 19 percent or more (as do many standard, non-rewards credit cards). But the interest rate only matters when you carry a balance from month-to-month, and if that’s the case then a rewards credit card isn’t right for you.

Interest rates are one of the last features that rewards seekers look for in a card because we don’t plan on paying a cent of interest – ever.

Once you get your first credit card statement, simply set-up an automatic withdrawal from your bank account each month and you’ll never miss a payment.

You Need too Many Points to Make it Worthwhile

Travel rewards and loyalty programs get a lot of backlash from consumers for a number of reasons – devaluing rewards, setting expiry dates on points, discontinuing cards, and imposing restrictions on how you redeem points.

The concerns are valid, which is why I prefer to use a cash back credit card for the majority of my spending. With cash back, you know exactly what you’ll get from your rewards program.

I used a combination of cards – including the Scotia Momentum Visa Infinite, the Capital One Aspire Travel World MasterCard – to earn over $1,500 worth of rewards last year.

How much do you get back when you pay with debit or cash? That’s right – nothing.

Rewards Cards Encourage You to Spend More

The theory is that when you pay with cash, once the money is gone there’s nothing left for you to spend. Some experts say this approach forces you to budget and control your spending – that you’ll feel a twinge of pain whenever you remove cash from your wallet.

When you use a credit card, on the other hand, you’ll turn into a spendaholic since you won’t actually see the money come out of your wallet (or your bank account, like with a debit card).

That’s fine, I get it. But that approach doesn’t work for me. Whenever I carry cash, it disappears faster than a three-goal lead for the Maple Leafs.

Once that $20 bill is broken, the toonies and loonies end up paying for coffee, parking, or magically disappear into my daughter’s piggy-bank.

The truth is that a credit card is great for budgeting because you get an itemized (and sometimes categorized) list of all your spending every month. Check your statement often and compare your spending to your budget to hold yourself accountable.

As far as I’m concerned, proper spending habits begin with setting and sticking to good budgeting principles.

Cash, debit and credit are just methods of payment. Which one of these payment methods actually helps put money back into your pocket?

Premium Rewards Cards Cost Retailers More

The Canadian Federation of Independent Business wants consumers to pay with cash or debit to helps keep prices low. That’s because Visa and MasterCard ding retailers with an interchange fee every time consumers pay with a credit card.

The fees range from 1.65% of the transaction cost with a standard credit card, up to 2.71% of the transaction cost with a premium “high-spend” card like the World or World Elite MasterCard.

Here’s a chart that shows the merchant fees for each credit card issued in Canada.

The CFIB says retailers should be able to pass along those charges directly to consumers. While surcharging may happen sometime down the road, there’s no evidence to suggest that retailers will pass along the savings by lowering prices.

Australia was successful in implementing a credit card surcharge back in 2003, but many retailers treat it as another profit centre as opposed to lowering prices for consumers.

The bottom line is that retailers will always find a way to pass on their costs to consumers in the form of higher prices.

When I pull out my Scotia Momentum Visa Infinite card at the grocery store, I know that I’ll get 4 percent cash back while the store has to pay 2.15 percent on the transaction.

A $200 grocery purchase gives me $8 back. If I used debit or cash, the retailer saves a few bucks, but I get nothing back.

Why not play the game and, as a consumer, come out on the winning side for once?

I Refuse to Pay an Annual Fee for a Credit Card

Another excuse that I hear is from people who refuse to get a rewards credit card that comes with an annual fee.

Refusing to pay a fee on principle is a stubborn, and sometimes ignorant, excuse. You need to do the math to ensure that you’re maximizing your rewards points – net of fees.

For example, say you can earn $240 per year with a no-fee cash back card like the PC Financial MasterCard, but you could have earned $450 a year by switching to the Scotia Momentum Visa Infinite. The math says that you’d come out ahead by $111 per year with the Scotia card, even after paying the $99 annual fee. So what’s the problem?

Final Thoughts

I’ll admit it took me a while to ‘get’ what rewards credit cards were all about. But once I started using rewards cards to my advantage I was able to maximize my cash back and loyalty points through smart spending.

Why pay $14 per month in fees for unlimited debit transactions when you can earn cash back on your spending?

So forget all these ridiculous excuses you’ve heard for not using a rewards credit card and start putting some cash back in your pocket.


  1. Johnny Eff on March 4, 2015 at 6:24 am

    Unfortunately, we are forced to play this game. All prices include the premium for credit cards, and by playing we get some of it back in rewards. By using cash you get nothing back. I’m not sure we can do better than break even. In the meantime retailers and the credit card companies have managed to slice themselves another piece of profit. And a lot of this comes from cash-payers such as the less fortunate. The deck is stacked.

    I am surprised by the chart and wonder about the economics of that. How can they pay back 4% when they are only collecting 2.15%?

    Great site, well done!

    • Robb Engen on March 4, 2015 at 7:54 am

      Thanks Johnny! I assume that because Scotia charges an annual fee, plus only pays 1 percent back on non grocery/gas spending, the bank comes out ahead. That said, the federal government has told Visa and MasterCard not to raise interchange fees for five years – so that might have an effect on a credit card issuer’s ability to pay higher rewards going forward. We’ve already seen Capital One discontinue one of the richest cards on the market because the bonuses were too high and not sustainable for the company in this environment. We’ll see if Scotia can keep its Momentum Visa intact.

  2. Beth on March 8, 2015 at 8:01 am

    Regarding #4 — Perhaps people don’t realize small businesses are hit harder than big box stories. The bigger you are, the greater the volume of transactions, the better the rate you can get per transaction and the less it will affect your prices. Small businesses are also less likely and less able to raise prices because they have to remain competitive with the big chains.

    It doesn’t have to be an either/or situation. I have a rewards credit card — I just don’t use it at small businesses.

    • Robb Engen on March 8, 2015 at 8:04 pm

      Beth, I agree 100% and have no problem using cash or debit at a small mom & pop shop. Many of them don’t even accept credit cards.

  3. CanadianMinimalist on March 16, 2015 at 3:58 pm

    Maybe a good practice for small businesses is to post 2 prices for each item/service they sell – one if you pay cash/debit, another price if you pay by credit card. I have seen this in one computer store a while back and they charged 3% extra if you paid by credit card.
    I agree that would be more work at their end to put 2 prices on each item, but they could post a single note like “3% Credit card commission”.
    At least the consumer can do the math and choose how to pay.

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