Cash-Back Credit Cards

The New York Times online edition recently posted an article comparing the utility of various cash-back credit cards. I've been a regular user of cash-back cards for quite some time now; in 2005 I accrued over $150 in goods and services via cashback cards and I've made some changes to both spending habits and card type that should boost that to over $500 in 2006. (I'm now paying virtually all of my bills via credit rather than check or cash. Of course, I haven't missed a payment or paid less than the full balance every month so I'm not paying interest or finance charges.)

I guess I'm not blogging on the relative merits of different cards, or of the companies offering the incentives. Rather, I'm facinated by the fact that we seem to be living in a consumerist paradise. In the past, credit card companies charged annual fees, ballooning interest payments or deceptive marketing to earn profits. Now they're offering us cash. (I understand that secured cards still exist, and do high-interest rate cards; they've simply become less common.)

But it's not just credit cards. Many merchants, like grocery stores, drug stores or clothing retailers, offer loyalty cards or discount electronic coupons. Automobile companies are now offering better prices, more features and bigger deals than they ever have in the past. Auto insurance - my god, I think I get somebody every month offering to reduce my premiums. The average US consumer already spend less on food (as a percentage of their mothly budget) than at any time in the last 50 years.

I guess my larger point is that we have more variety, more power and more information to obtain greater value than ever before.

The depressing coda to this litany of the benefits of global capitalism and free trade is that, rather than leverage this power to provide for the long-term financial health of themselves and their families, people fall victim to rising expectations. We have a tendency to compare ourselves against the Smiths next door and, perhaps more importantly, the Smiths on television. When we compare, we compete and material goods are the cleats and helmets in this game. In the words of one post-Christmas shopper who was snapping up discounted Kenneth Cole and Gucci, "I always shop on the day after Christmas - I'd never be able to afford these brands otherwise!"