Do the maths!
Just been reading the article about Old Mutual’s new credit card where the reward is an innovative “units in their money market unit trust fund”. On the face of it this is a great rewards offering…but do the maths and I cant believe how OM can get it so wrong so often.
They are offering an Amex card and a Visa card with the Amex card offering a higher reward than the Visa card – problem is that there are still many places that don’t accept the Amex card and so most people will end up using the Visa option.
The visa card option will give you 0.5% of your spend in money market units. So if you spend R10000 then you will effectively get R50 in units each month…if you spend R5000 then you will get R25 in units each month. Not bad until you factor into this the cost of the card…at R35 per month, unless your credit card spend on the Visa option is R7000 or more it is going to end up costing you…
There are so many seriously better credit card reward options out there…I’ll be staying away from this one.
P.S. In 2007 there were over 15 billion credit card solicitations in the US and the average family owed more than $8000 to credit card companies although many researchers believe the figure to be substantially higher at $12000.