Shopping with a credit card has its advantages. Along with the convenience and the ability to purchase items that may otherwise be unaffordable, some credit cards offer perks for their loyal customers. However, consumer advocates may be concerned about the dramatic increase in the required spending to earn those attractive perks, especially since credit card debt is one major factor when consumers in Connecticut and elsewhere file for Chapter 7 bankruptcy.
A relatively new trend with more prestigious credit cards is the signing bonus. These perks are offered to customers who spend a certain amount of money within the first few months of opening the card. Some of these bonuses include hundreds of dollars worth of air travel credit, free stays in hotels and bonus points that can be used toward shopping or travel.
However, newer versions of these premium cards include upgraded spending requirements. For example, the Citi Prestige card now requires a customer to spend $7,500 within the first three months, up from the previous $4,000. Customers who do so earn 75,000 points. American Express has raised the spending minimum on its Platinum card from $3,000 to $5,000. Credit card companies hope that by offering such bonuses, consumers will become invested in using their cards for frequent purchases.
Unfortunately, with the median income in most American households hovering around $57,000, striving to spend that initial amount may lead many to overspend in ways their fragile budgets cannot afford. In many cases, those in Connecticut with credit card debt may reach a breaking point when an unexpected change -- such as a job loss or sudden illness -- leaves them struggling to meet their obligations. When facing such struggles, the advice of a compassionate attorney may help those burdened with credit card debt determine if Chapter 7 is a viable option.
Source: Fortune, "Those Credit Card Rewards Could Cost You More Than You Think", Aug. 4, 2017