Credit Card Companies Think You’re Stupid


Image courtesy of David Castillo Dominici /

Over the weekend I saw a credit card commercial that had me shaking my head.

In the commercial, two woman are having lunch at an outdoor restaurant when one woman suggests the others’ friends are simply inviting her to events so they can pay with their credit card and earn credit card rewards points. When the bill comes, woman #1 whips out her credit card and offers to pay. The commercial ends with the two staring at each other, one wondering if she is being used, the other hoping her friend won’t figure it out.

Seriously, do credit card companies think we’re that stupid?

The implication being that the credit card’s rewards progam is so good that you’ll want to buy things for your friends to earn as many points as possible. The commercial is certainly meant to be humorous, but let’s not get confused here.

Credit card companies want you to to over spend.

This point can’t be made any more obvious than in this commercial. The more you spend with their card the more money they make, and reward programs are designed to entice you to favor one credit card over another. Retailers have to pay for each credit card transation, but the real money is in the interest you pay on your revolving balance.They’re depicting a credit card culture where it’s not only OK to buy yourself things with your credit card, but it’s normal to pay for your friends, too. What they don’t show is the person later opening their credit card bill and being shocked at the balance, realizing that they’ve overspent, only making the minimum payment.

I don’t know about you, but I don’t have a “Buy Stuff For My Friends” budget category.

They’re trying to shift your focus away from how much money you’re really spending, and towards the cool reward points you’re earning. Credit card reward programs give you either cash back, or points that can be redeemed for products. But remember that in every case the rewards are teeny, tiny, minute percentage of the total spent.

News flash: If you can’t pay your bill in full each month, double digit interest + single digit rewards program = you lose.

The good news is, you can outsmart credit card companies. You can reap the benefits of their rewards programs without flushing interest payments down the toilet by following these two steps:

  1. Before swiping your card, ask yourself the simple question, “Do I have the cash to pay for this right now?” If the answer is no, practice safe spending and keep your card to yourself.
  2. If the answer is, “Yes,” then go ahead and swipe. Then put the cash in a lockbox, attach it to a cement block and drop it to the bottom of a very deep lake until your bill arrives. Translation: DO NOT spend it.

Ok, so it’s a little bit more complicated than that. My point is that following the above two steps is extremely difficult for many people. I find #2 to be down right impossible. That’s why I’m striving to lead a life free of credit cards. Cash and debit card only for this guy.

So if I ask you to lunch, you can be assured it’s simply because I enjoy your company.

About Travis

29 Responses to “Credit Card Companies Think You’re Stupid”

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  1. dojo says:

    Now that’s clearly a misleading commercial. Rewards are the best way for the credit card companies to lure in more customers, who feel like they’re missing out if they don’t collect the cash-back or rewards. If you can’t keep up with the payments though, you’ll be in deep trouble. We have chosen to stay away from this and spend only as much as we really need. Our biggest rewards are being debt free and SAVING more money each month than we’d do with a credit card.

  2. Sassy Mamaw says:

    Yep. There is another credit card commercial where a girl asks her Dad if she can go to a concert. To paraphrase, he says yes, and don’t forget to ask all your friends, too!

    I love your two points at the end. As I read them, I was thinking – I’m pretty good with #1, but #2 is the toughie. I noticed you feel the same way!

    • Travis says:

      Concerts for ALL your friends…and I’ll take that 1% cash back for hundreds I laid down for everyone. Pass. 🙂 #2 is definitely hard – how easy is it to keep the cash, pay the minimum payment, and think you’ll pay it off with the next bill. Except you don’t, and soon you’re in the death spiral of debt. Great minds think alike, right Sassy Mamaw?

  3. Very good point Travis. I do the same thing…sort of. If friends have cash on hand they pay me their portion of the bill and I put the whole thing on my card to get points. Or I buy the movie tickets online and friends give me money at the theater. BUT, you’re right in that you have to MAKE SURE you can pay it off right away. I literally pay my bill after about a week of usage to make sure I’m on track, plus psychologically I hate seeing large numbers on my credit card.

    • Travis says:

      Great to hear you have the discipline to pay the balance even before the bill comes….I’d probably take that cash right to the concession stand. 🙂 Thanks for sharing your experiences!

  4. I’m with you on this one, Travis, for I only stick to cash and debit cards as well. My credit card is for emergencies only.

  5. I love this!!!!!!!! I just watched that same commercial and had the same reaction! I don’t even carry a credit card with me, it’s debit only for this chick.

    I love what @Dojo above said, “Our biggest rewards are being debt free and SAVING more money each month than we’d do with a credit card.” You said it girl!

  6. Mackenzie says:

    I just saw this commercial for the first time this weekend; I thought it was ridiculous, too!

    • Travis says:

      I had to rewind it and watch it again just to make sure I really saw what I thought I just saw, Mackenzie. Commercials making a joke out of bad spending habits….just what we need to have on TV.

  7. E.M. says:

    I hate that commercial, and the other one they made. It’s so silly! I really hope people don’t fall into that trap and think it’s better to “use” people for points, rather than use the credit card for normal purchases. I only throw bills on my credit card if people can give me the cash to cover their share. The commercial is sadly promoting irresponsible usage of reward cards.

    • Travis says:

      Having others give you the cash to cover their share is obviously the way to go, EM, along with having the discipline to send that cash to the credit card company. But showing that side of the story isn’t nearly as sexy or exciting. 🙂 Thanks for stopping by!

  8. How about we ban credit card commercials like cigarette commercials were banned? They’re both potentially lethal, just in different ways.

    When I see immensely stupid commercials like the one you describe I always think about the marketing people who put it together and how clever they must think they are. I couldn’t look in a mirror if I spent my professional life trying to induce people to do stuff that’s counter to their best interests. This is where elementary and high school personal finance education could really make a difference.

  9. That ad is so ridiculous! I’ve seen it a few times and it’s hard to watch. I think credit card companies are having trouble thinking of logical arguments, though, and try to “one-up” each other by making something original – even if it is completely ridiculous!

    • Travis says:

      I’m sure they were going for the humorous “shock value” sort of thing, DC. But for someone who racked up a TON of credit card debt, seeing them promote bad spending habits amounts to a really bad joke. 🙂 Maybe one day I can learn how to play the system, take advantage of their rewards programs correctly and take back from them just a little bit!

  10. There’s another reason to stop using credit cards: The benefits they give tend to go towards wealthier people who manage to pay off their cards every month. Points and other rewards are largely funded by less wealthy people who get trapped in the debt cycle. I hope to go the cash & debit route too. I find it isn’t easy to do so though! Our world is definitely set up for credit cards. And debt.

    • Travis says:

      Our world is increasingly a “give it to me now” kind of place, and credit cards give you essentially a pre-approved loan to let you do it. That’s a dangerous situation to be in for those that are susceptible to impulse buying. Thanks for reading!

  11. The title of this post cracked me up! This is a very sad but true point. We also just try not to use the credit cards because no rewards are worth it if we overspend and can’t pay the bill!!

  12. I remember buying Starbucks for a team of retreat volunteers once (60 orders) on my credit card for rewards! But every single one of them paid me with cash before I did so. I wouldn’t buy people stuff just for rewards, usually they’re not worth it.

    • Travis says:

      Wow, that’s a lot of caffeine!!! It’s good to know that everybody paid you cash for it though, otherwise that would have added up to an impressively large bill!

  13. The sad thing really is that some people are going to fall for the premise. Most educated people will see the humor in it, but it won’t be the same for everyone. I don’t have a budget category for paying for others either and don’t plan on adding one. Credit card companies make their money when you don’t pay your bill in full.

    • Travis says:

      I’d love to see a commercial made to show exactly what someone goes through that’s drowning in debt….and play it right after one of these commercials. One of those “equal opportunity for an opposing view point things.” Wouldn’t you, Grayson? 🙂

  14. jennydecki says:

    I saw a similar commercial where the guy buys a bunch of expensive concert tickets for his daughter and her friends and the guy he’s with looks at him like he’s lost his mind until he explains he is going to get double points for every purchase.

    The points system always makes me think of the gold stars on the chore chart. Kids are dumb enough to think they’re AMAZING, but adults know you can get a bunch of those stickers for a buck. You’re teaching the kids the value of work with those stickers.

    I wonder if the person who came up with points and rewards did the gold star reward chart with their kids and thought, “This is a great way of teaching people to do what we want them to do!!”

    Spending twenty dollars to save ten still means you spent ten dollars. You didn’t save a darn thing unless it’s in a bank account or under a mattress somewhere. *sigh*

    • Travis says:

      Wow, Jennydecki, the gold stars analogy is a great one. Parents want the kids to concentrate on the shininess of the gold star, not how little they cost. Credit card companies want us to concentrate on how much better their rewards are in comparison to other credit cards, or how “awesome” it is that you get something back at all. I remember a great saying my mom used to say when I was a kid, “It’s not a sale if weren’t going to buy it anyway.”

  15. Brian says:

    Feel like saying, the problem is people are actually this stupid. It’s been proven that people will spend more 10x more money just to reach a $10 reward threshold. The same goes for cash back. What is terrible is that I’m not seeing bitcoin being merged into these commercials, and knowing people are actually so stupid that rather than use an exchange to buy bitcoin they will buy the hip sounding credit card instead.

    I cannot understand why we have so many stupid people, but since intelligence isn’t a survival trait it makes sense that humanity is getting really stupid.

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