Okay, so we’re checking out at the Costco the other day when a lovely young man stops us from swiping our debit card. He starts telling us about this great new Costco MasterCard that we automatically qualify for because of our membership.
With this fabulous credit card, we would get cash back on our purchases every time we used it. It was something like 3% cash back if you use the credit card at a restaurant, 2% cash back on gas purchases and 1% cash back on anything else you buy with the card. Naturally it wasn’t a flat cash back amount on everything because that would be too easy.
Sounds interesting
we said. And before we knew it, we were whisked over to the Mastercard table. The kid was good. He talked so excitedly and so fast that you couldn’t help getting excited too!
Oh my goodness, this sounds so great!
Yes, I just use the card and then what?
I get some of every purchase back?
It’s like you’re paying me to use the card! What a deal!
How can you afford to offer this?
Well, I’ll tell you how! He had the whole form filled out for my BF before I saw it. On the “terms and conditions” that I happened to get a glance at (note, that he did NOT show it to me), was the point that brought me back to reality.
If you don’t pay off the entire balance of the card every month (and a high percentage of people don’t), the interest rate is 26% just like every other credit card.
When I pointed this out, the lovely young man was not phased one bit. In fact, he seemed genuinely surprised of our concern. He advised that we just make a habit of sitting down every week, adding up what we spent and then transferring the money right away to the card. He says that he does this every Sunday night.
Really? Has money become a game now? It’s too much work!
Now might be a good time to tell you that we learned during polite conversation that this gentleman was a teacher through the week and worked at Costco on weekends. Hmmm. Two jobs? Maybe he uses his credit cards a bit too much? I shouldn’t assume though.
Fortunately, he had to go away to check something before we actually signed and we had a chance to talk. We both already have a couple credit cards, do we really want another one? And if we each have a card, how can we keep a handle on what we are charging on it. There is a good chance (in fact, they’re banking on it) that we will overspend and not be able to pay the entire balance. If that happens our cash back of 2% is now costing us 24%.
I can see now how so many people get roped into things. Get a cute girl or guy who can feign excitement while spinning a grand tale of how “this offer” is going to change your life. In fact, you can’t afford NOT to take advantage of it! And, BAM, before you know it, you are now the proud owner of a set of encyclopedias.
I use the encyclopedia reference because that one actually happened to my dad about 45 years ago when they sold these things door to door. The salesman convinced my dad that these encyclopedias were essential to our (us kids) education. Of course, the only thing I learned was how to dust. Oh yes, I used to have to dust those encyclopedias every week.
I’m not saying that this Costco offer is fraudulent in any way but you do hear stories all the time about how people are bamboozled out of money. I’m especially angered when I hear that it’s a senior that’s been taken advantage of. So many don’t understand the terms that the salespeople use, aren’t given all of the true facts of the offer and get confused when they are speaking so fast. Which, by the way, is the very reason for the fast talking.
The trick is to walk away for a moment and think about it. In our case, we got lucky because the Costco dude walked away. I say lucky because I’m willing to bet that we would have walked out with that card if we didn’t get that moment to think about it. The kid was that good.
If it’s someone at your door or on the phone and they’re telling you that the offer is only for that moment, then ask for their contact number. Tell them that you will think about it and call them if you’re interested. If they can’t hold the offer, then it’s likely not a reputable company. I have done this a million times and I can’t recall one time where I called back after reviewing the information.
Ultimately, we didn’t go for the card but I looked it up on line when I got home. It’s actually a pretty good deal and, if you use the card for everything, the cash back could really add up. But if I buy everything on the Costco MasterCard for cash back, then what about the Shoppers Optimum MasterCard I got to accumulate Optimum points? Do we split our purchases? He gets cash back, I go for the Optimum points?
Uugghh! I think I’ll just pay in cash.
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