Reward Points ... financial benefit or burden? some personal thoughts and opinions from a bankruptcy attorney

A small law practice is like any other small business. It has good months and bad. If you string several bad months together it can cause the demise of the office just like any other small business. So, when I opened my office in 2013, and before I joined my partners, I needed credit cards to get through the tight months and try to find an office supply company that will sell you office supplies and bill you later. Needless to say, my credit card balances started to grow.

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Once I started stringing good months together, I thought I should start using more cash and rely less on credit cards ... makes sense right? But I had these great cards that offered me "points." So I decided to use those cards and pay what ever I placed on them as well as pay towards the balance. This way I could offset the use of the cards with the benefit of the points. I have a Costco Executive Business Credit Card, which actually pays cash back at the end of the year. I also use it for discounts on a couple business services I use.

Another card I use is my AMEX. It can earn points quickly and I even used points in the past to buy business supplies on Amazon. My wife has her cards with points and we even used some of those points for airline tickets once. The lure of reward points is why I decided to continue to use the cards.

While I expected to pay the charges each month, I found it was easier said than done. At the end of the month life would happens and the cash meant for the cards would be used  for something else. I found my cards continued to climb. The whole reward points thing wasn't really helping me. In fact, these programs encouraged me to use my cards more than I expected and should.

I suggest this is the purpose of "rewards" programs. The programs encourage use. When a family is financially strong, these are nice perks. When a family is financially stressed, I also suggest, these programs may cause a distraction and a false sense of benefit. Just take a moment to think about why you are using the credit cards you do. Maybe it will help you to avoid meeting with someone like me.

But if you need to meet me or just want to know more about me, Mark Medvesky, or our firm of Wells, Hoffman, Holloway & Medvesky LLP, check out our website at www.whhmlaw.com.

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