Why the Best Credit Card Rewards Strategy Is a Slow One

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For those who rush into the credit card rewards game, the consequences can be severe and long-lasting. After all, average credit card debt per indebted household stood at $9,100 in 2017. While some of that debt is probably the result of emergency spending, it’s inevitable that some of it also comes from poor planning.

A former neighbor of mine recently told me how she racked up debt in pursuit of rewards. In the midst of a move across the country, she signed up for a travel credit card that would let her use miles for flights or transfer to airline partners. She was going to spend money on her move either way, so why not get something in return? She was going to pay off her balance right away — or so she thought. What could go wrong?

As life would have it, the mother of two faced higher moving expenses than anticipated. She also struggled to find a good job right away, which left her relying on credit to pay other bills. In the end, she wound up with a ton of debt and some negative marks on her credit report.

Now she’s stuck trying to pay off credit card debt at a high APR until she can qualify for a balance transfer card with 0% APR for a limited time. It’s easy to see what went wrong here; she used credit card rewards without a real plan in place — and without enough cash to cover her bills or an emergency.

The potential for debt is one of the major pitfalls of credit card rewards, but there are plenty of other reasons you should approach this strategy at a snail’s pace. There’s a lot that can go right if you win the game, sure, but there’s even more that could go wrong. Here’s why you should proceed with caution.

Credit cards may cause you to spend more

While many people who pursue credit card rewards say using credit doesn’t change their spending habits, some academic research suggests that, at least for some of us, spending habits can change quite a bit.

One study published in the Journal of Experimental Psychology: Applied in…

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