I was bored the other day, looking up some cash-back credit cards with high bonus offers and came across a rather unique product offering I had never seen before – a credit card that rewards you with points based upon the interest you accrue. What the heck?
The Commerce Bank (no relation to TD Bank) Special Connections Visa with Rewards
Annual Fee: None
Highlights:
- A versatile card that can be used for both credit and ATM transactions
- FREE rewards program with unlimited point earning and flexible redemption options.
APR: 0% Introductory1 APR on Purchases and Balance Transfers, for 6 monthly billing cycles after account opening, then a competitive rate of 10.24% to 20.24% APR.
Rewards:
- Earn one point for every dollar in net merchandise purchases
- Earn three points for every dollar in interest you accrue on your monthly balances.
- Earn bonus points at thousands of participating retailers when you use your Commerce Bank Rewards credit card to shop in-store, or online through the commercebank.com/rewards website.
- Points can be redeemed for merchandise, gift cards, travel, cash back and more! A cash back redemption is applied to your account as a statement credit.
You can redeem your points here, and are able to get gift cards, cash back, travel and merchandise. While the rates aren’t publicly disclosed on the site without logging in, it looks as if points are worth a penny a piece which is standard.
Why This is Such a Bad Deal
Let’s say you have a $100 balance at the end of the month (to make it easy), with a 10% interest rate. That means, if you don’t pay your balance in full, you’ll end up paying about $0.80 on top of the balance for a total of $110 or so a year. On the $10 interest, you’ll earn 3x the rewards, which, at the best level, is 30 points which would be about 30 cents worth of travel…yup, 30 cents. So, for your $10 in interest, you got back 30 cents. Big whoop.
If you ever want a bad deal, this is one. Interestingly, the 1 point you earn on ever dollar is actually an “ok” earning rate – yeah, it’s not the best, but it’s standard amongst a lot of credit cards, including the American Express Platinum Card. It’s the 3x on interest that gets me, though.
Jamie Larounis is an avid traveler, blogger and miles/points educator. Traveling well over 100,000 miles a year and staying in hotels for over 100 nights, he leverages miles, points and other deals to fly in first class cabins, and stay in 5-star hotels. The Forward Cabin shares his experiences, musings, reviews, tips, tricks, resources and industry news with you, the fellow traveler.
I agree this card is a complete rip off. However, I think that your math is a bit off. If you APR is 10% and you carried a $100 balance for 1-month you would pay around $.83 in interest (they may have a minimum charge of a dollar or so). APR is per year. You aren’t paying 10% per month.
Sorry, you’re right. I’ll amend that.
If you are someone who anyway carries a balance then this is pretty good.
Ha. True. I hope no one actually does!
Now, if you can find a card that lets you earn interest on your points balance, that would be worthwhile!