If you've seen the ads for Disney's (NYSE: DIS) new credit card, you'll be treated to a whimsical look at kids encouraging their parents to spend money. Why? To earn enough reward dollars to bankroll a trip to Disney World, that's why.
But the problem with the $100 million marketing campaign behind the Bank One (NYSE: ONE)-issued Visa card is that for a cardholder to earn enough to points to pay for, let's say, a $2,000 week vacation package, he would have to run the plastic through $200,000 in charges.
Practically speaking, most cardholders will probably use up the rewards at their local Disney Store in $10 increments for every $1,000 spent. Still, it just goes to show how far reward cards have come that Disney has disbanded its Disney Club subscriber program in favor of milking the financial advantages of co-branded credit cards.
For the record, we, too, recently launched a credit card that pays back a 1% cash rebate or entitles the cardholder to earn points toward awards. The trend has become so widespread that if you're not getting some form of cash rebate, reward incentive, or frequent-flyer mileage out of your credit card, you're probably leaving some points on the table.
As a consumer, if you pay your balances off every month, it doesn't make sense to be a cash buyer when you can nickel-and-dime your way toward everything from free gas to hotel stays. The key is finding a co-branded charge card that caters to your spending habits.
The reward levels tend to stick close to the 1% mark, though there are exceptions, such as the generous GM Card from General Motors (NYSE: GM), which allows users to accumulate 5% of their charges toward the purchase of a new GM car.
From Amazon.com (Nasdaq: AMZN) to Six Flags (NYSE: PKS), if you have a passion for something, odds are that there's a loyalty program tied to a charge card with your embossed name on it. Just make sure that you read the terms and conditions of the card. Look for cards with low rates and no annual fees.
Check our Credit Center to make sure that you're not in a position to abuse the plastic. Really. Unprepared spenders may soon realize that charging isn't only a foul in basketball.
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