Nowadays most credit card companies have an online “mall” where you can earn extra rewards when shopping at participating websites. These programs can save you money, but here are 5 reasons why they may not be the best idea.
1. You have to pay with the affiliated credit card
In order to earn rewards with a given credit card mall, you have to pay using the affiliated card. This can be a major drawback if that particular card doesn’t include the benefits you want.
For example, let’s say the Discover card mall (ShopDiscover) offers you the highest rebate at a given computer store. That’s good, but what’s not so good is that Discover doesn’t offer purchase protection or the extended warranty benefit on any of their cards. Those are perks you will probably want with your computer purchase, right?
The nice thing about FatWallet’s cash back shopping program is that you can use whatever credit card a given store accepts for payment. So with the computer example, you could pay using your American Express card (which includes the aforementioned benefits).
2. The store selection may be limited
Did you know that FatWallet has over 1,000 stores participating in its cash back program? You will be hard pressed to find that big of a selection with a credit card mall.
The Chase Ultimate Rewards Mall has about 450, MasterCard Marketplace is around 150, and ShopDiscover is approximately 200 retailers. Those numbers are nothing to sneeze at, but they’re still a far cry from FatWallet’s mega assortment or stores!
3. Mall rewards + coupon codes = unlikely
More often than not, the credit card’s program will offer a flat percentage rebate at a website and that’s it. You probably won’t be offered any additional opportunities to save, such as coupon codes. In fact, if you attempt to use a coupon code in conjunction with the mall, it might invalidate your mall rewards!
It’s important to factor this into the equation. Who cares if you get 5% cash back from your credit card mall, if that means you have to miss out on a coupon code for 10% off. Does that make any sense? I think not!
Something unique about FatWallet’s cash back shopping program is that you will find coupon codes and deals offered with quite a few of the participants. For example, not only does it give you the highest rebate on GoDaddy (a whopping 12%) but along with that, you also can use FatWallet’s exclusive GoDaddy coupons to save even more money.
4. Having to jump thru hoops during redemption
FatWallet’s program is very straightforward; you get paid by cash or PayPal. You don’t have to worry about converting points to cash back or any of that other funny business, because you know exactly what you will be getting. With the credit cards, be careful because not all of them operate in a transparent manner like that.
Take Bank of America’s WorldPoints Mall, which gives 4x points at Holiday Inn. Meanwhile, the FatWallet program gives 4% cash back. Both are the same value, right? Not necessarily.
With BofA, in order to get $0.01 per point, you have to save up and redeem a minimum of 25,000 points in one fell swoop. If you only redeem 2,500 points, it’s a $12.50 check (that equals a half-cent per point).
Conclusion? Sometimes a credit card program will give the appearance of having great rewards, but then make you jump through hoops in order to redeem them at full value.
5. Credit cards aren’t for everyone
Even though I own and operate CreditCardForum, I’ll be the first to admit that credit cards definitely are not for everyone.
If you don’t pay your balance in full and on-time every month, then you probably should avoid them altogether. I mean let’s use our noggin here… earning 5% rewards at a store vs. paying 22% for interest? Come on, that’s math even a kindergartner can figure out!
So if you’re in the camp where credit cards wreck havoc on your finances, then their malls will just lead to more ruckus. You’re better off sticking with a debit card and seeking other ways to save. Lucky for you, FatWallet offers plenty of ways for you to do just that!
Michael Dolen eats, sleeps, and breathes credit cards. When he’s not busy blogging about them, he practices what he preaches! For shopping at brick and mortar stores, his favorite cashback cards strategy involves using multiple credit cards for different categories of spending. For online purchases, he recommends FatWallet’s cash back program.