You may have seen several television commercials or newspaper ads, which tell of credit cards that are linked to a savings account in your name. Instead of receiving reward points or miles, you get money added to your savings account each time you make a qualified validcc vip purchase with the card. Is this a good thing for consumers, you might ask?
My answer to that question is a qualified “yes, for the right cardholder.” Let me explain. As we all know, there are many different types of credit card users. Some credit card users could be considered “credit junkies,” by which I mean that they use credit cards to buy things that they cannot afford, in order to satisfy a need they don’t understand. Other credit card users buy things on credit to get miles or reward points, and then redeem the miles for trips, or the reward points for items they would normally not be in a position to purchase outright. Other credit card users are so afraid of going into debt that they use the credit cards only for purchases they can afford to pay for in full at the end of the month. I am sure there are many other types, and many shades between one or the other, but these are the user types we hear a lot about these days.
I read in a newspaper recently that the savings rate in America today is at the lowest point in decades, possibly the lowest point ever. This is a pretty frightening statistic. We Americans are spending everything we make, with no savings built up for retirement or emergencies. We overspend for bigger houses, fancier cars, the latest TV or computer gadget, or the best in sporting equipment, and statistics show that we (in general) are just a few weeks away from complete devastation if something goes wrong.
David Bach, the popular speaker and author of The Automatic Millionaire, makes a terrific point about how people with average incomes and a plan for action, can save enough during their working years to retire comfortably in their later years. Mr. Bach recommends that everyone be on a savings program among other things, and that the program be automatic. Let me repeat that, the savings program should be automatic. The program should be one that you could “set and forget” to the greatest extent possible. This makes a lot of sense, but unfortunately very few people actually put a program like that in place for their family.