WHAT??

I read a lot of personal finance blogs. I can't help it. I may have an English degree, but I have a financial background. Blame my dad. He's always been very money aware and I picked it up over the years. Working for the Trust Dept of a bank for 8 years just compounded the interest (Ha! I made a pun!). I read a lot about personal finance and I live by the Dave Ramsey code. My faith tends to be ingrained in every aspect of my life, including my views on finance, so I'm a bit more fanatical about it than most. I do, however accept the fact that not everybody agrees with my personal views on personal finance (as Dave would say, that's why it's PERSONAL finance!) and the majority of the blogs I read make suggestions that I don't agree with, particularly regarding credit, from time to time. That's fine. I'm intelligent enough to process my own opinions and discard the information that I don't think has merit for my situation. I still read them because a lot of the other information is either useful or thought provoking.

I make that disclaimer so you'll understand that I'm not trying to pass judgement or ridicule anybody. Everybody has a different situation and what works for me may not work anywhere else. However, I almost croaked when I read one post today. A guy was talking about his personal finance goals, one of which was to increase his credit card cash back reward thing on one of his cards from about $200 last year to $500 this year. Huh?

He went on to say that so far he had over $200 in cash back, compared to about $130 this time last year. This was because his charges were up from about $11,000 last year to $18,000 this year. WHAT??? He even pointed out a couple of large luxury purchases he charged to make up some of that increase.

Ok, basic math. You spend an additional $7,000, you get an additional $100 refunded to you for using a credit card. Which means that $100 just cost you $6,900, plus interest.

I realize there's the "but he would have spent that money anyway, at least he's getting something back" arguement. But that doesn't take into consideration the cost of the risk of using the credit card. Or that the $100 won't pay one month's interest on those purchases. And if you've got the money to pay it off every month, why bother using it at all? Is it really worth $100 over 10 months? We make more than that off our money market savings account.

I'm not saying that the credit card bonus stuff is evil. Well, it is evil, but that's not my point here. My point is that I can't believe our society has gotten to a point where people actually set financial goals to buy more large luxury items on credit so they can get a tiny amount of that money back. It just doesn't make sense. That's not a financial goal, that's closer to a financial disaster waiting to happen. No wonder we keep having problems like the current sub-prime mortgage crisis. You just can't make money by spending more money on "stuff!"

And for the record, every time I see the Chase Freedom credit card commercials I want to throw something through the TV.