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Getting Punished with Rewards

When it comes to money, I’m a bit of a goody-two-shoes. I have two credit cards I chose very carefully, always pay bills on time, and stay far below my credit limits. As a result, I’m sort of getting screwed.

These days, since I’m earning less money, I need my credit cards more then ever. I’m not talking about running up more credit, but the second currency I’ve built up over years of hard—yet responsible—spending.

In flush times, credit card rewards are a nice bonus.  Since I lost my job, they’ve been helping to make up for my reduced cash flow. I used three months’ worth of American Express Membership Rewards to offset the cost of a hotel room for my cousin’s wedding. I used some to buy a toy for my oldest nephew. I debated using frequent flyer miles from another card to renew my favorite magazine subscription, but decided to hoard them until I need to fly, and hope they didn’t fall in value.

Now my little nest egg could be a casualty of the big credit card reform bill Congress passed this week. I support the measures in the new law. Why should companies be able to raise interest rates at whim, overload customers with fine print, or penalize you on amounts that were paid on time? The bill is fixing all of that.

But card companies say that people like me—who were careful with credit and paid their bills—could be penalized. They may start raising up-front fees and cutting back on rewards programs. I’m keenly aware that this is a privileged problem to have. Rewards are not a right. But neither is credit. Fair? My mother is always reminding me that life isn’t. How about this deal: You take away my points, you drive me to the wedding.

Tags: credit cards, personal finance, spending, Spending and Saving