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Monday, April 5, 2010


For those of you who possess a credit card with a "rewards" program, have you ever stopped to think who pays for the reward points? Let me give you a hint, it's not the credit card companies. Such programs are popular among consumers and used to obtain such things as travel, books, CD's, DVD's, electronics and photography, home and garden items, sporting goods, toys, gift cards, and a lot more. Some even help you finance the purchase of a new car. The more you use it, the more points you accumulate for freebies; sounds great, right?

In reality, every time you use your credit card, the merchant is charged extra for reward points. Now, you don't really think the merchant is going to foot the bill for your rewards do you? Of course not. Instead, he is forced to raise his prices to compensate accordingly. This means you are footing the bill for all of this. Interestingly, some reward programs have a policy whereby you forfeit the reward points if you do not use them within a certain period of time. When they expire, the points revert back to the credit card company who keeps the money associated with them. Not a bad little scam is it? Someone in the marketing department of the credit card companies was really on the ball as this program significantly induces consumers to use credit cards as opposed to checks or cash.

The point is, whether we know it or not, we are all getting "nickeled and dimed" to death, and I'm sure we can all site instances where we, the consumers, are being duped into paying for what appears to be innocuous costs. For example:

* A penny sales tax as levied by a government body. A penny here, a penny there, and it all adds up rather fast.

* Wire transfer fees to move money from one account to another. This is a favorite of U.S. banks. Not only do they charge you for the service, but they hold your money for 24 hours so they can make interest on it. In this day and age of electronics, you would think such a service would be cheap and instantaneous; maybe in Europe and Asia, but not in the United States.

* Paying a surcharge on fuel, particularly as the price of gasoline falls.

* Products priced at "Just $X.95". I wonder why some people have an aversion to round numbers. I have never bought anything at such a list price, something is always added on to it, particularly "handling and shipping" charges. Let us also not forget the 9/10 cent added at the gas pump.

Regardless of how little we seem to be paying, it all adds up over time, and is paid by the consumer and nobody else. Actually, I think it is rather brilliant marketing to make consumers believe they are saving money. It's not the nickels and dimes that bother me, it is the pettiness that rubs me the wrong way and how we are being treated as suckers. Maybe we should return the favor and pay our bills less five cents, whereby they have to send us a $.42 letter notifying us we are in arrears. I would love to see them turn that over to a collection agency.

Nonetheless, I now have a true appreciation for the old proverb, "If you take care of the pennies, the dollars will take care of themselves."

Keep the Faith!

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Tim Bryce is the Managing Director of M. Bryce & Associates (MBA) of Palm Harbor, Florida and has over 30 years of experience in the management consulting field. He can be reached at

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Copyright © 2010 by Tim Bryce. All rights reserved.