Cash-back cards: are they worth it?
🔸 Plus: A wild conspiracy theory about Taylor Swift 🔸 Scotland's rent freeze resulted in rents going up 🔸 Results from a guaranteed basic income experiment where everyone got £790 a month 🔸
Hello! Here’s today’s 2-minute guide to demystifying money and making you richer
Cash-back cards sound good but are probably not worth it: our verdict.
A conspiracy theory about Taylor Swift says the Pentagon wants her bf’s team to win the Super Bowl.
A judge cancelled Elon Musk’s $56 billion pay package with Tesla.
Steven Bartlett of Dragon’s Den backed a company that claimed you can cure ME by putting seeds in your ears.
George Osborne has a new job at Coinbase, the crypto platform.
Easyjet is offering free holidays for grandparents.
Results from a guaranteed basic income experiment in Austin, Texas.
Scotland introduced an emergency freeze on rents - and then rents went up.
Yesterday’s markets
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Bitcoin: $42,516.20 ⬇️ 0.99%, ⬇️ 3.75% YTD
GBP to USD: $1.2674 ⬇️ 0.43% YTD
GBP to EUR: €1.1727 ⬆️ 1.69% YTD
Are cash-back cards worth it?
You’ve seen the ads all over town: Open up an account with us and our “cash back” card will give you free money every time you use it. One of them, the American Express Platinum Cashback Everyday, promises to give you 5% cash back every time you buy something.
That sounds like an amazing deal. Free money! Just for doing normal things like buying groceries!
But if it sounds too good to be true — it probably is.
Before you get too excited and fill out an application, bear in mind that for most people cash-back cards are probably a bad idea.
Here’s why
Banks aren’t stupid. They can see you coming. By offering you “cash back” they know you will be tempted to spend extra because of the “free money”. This is how they get you.
Cash-back cards are generally credit cards — meaning you’re racking up debt with interest payments attached. The rates can be shocking: 25% to 31% is a common annual percentage rate.
At that price, all 5% cash back does is reduce your interest from 31% to 26%. Not much of a deal.
Because they are credit cards you MUST pay them off in full every month or you’ll get hit with big interest penalties. These are cards for people who already have money, in other words.
Taking out yet another credit card will probably hurt your credit score a bit. So if you’re saving for a car or a house — this may actually set you back.
Cash back comes with strings attached. The rewards may be capped. One of the famous ones only gives you a maximum of £15 per month. They may only be paid after certain lengthy time periods. There may be minimum spending requirements. And the cash-back rates often go down the more you spend.
Sometimes — especially with store cards — you are restricted to spending them at certain shops.
And cash back is usually credited only to the card you’re using — which means you’re stuck using that card even when you don’t want to.
Bottom line: Cash-back accounts are for people who already have money
People who aren’t afraid to spend it.
People who can already pay off their credit card bills in full every month.
And people who are so loyal to a certain store that, having done the maths, they know that they’ll save a few pounds by using what is really a loyalty card.
The cash rewards are so small they aren’t worth it for most people.
If that isn’t you — stay away
There are better deals out there for people who want to start saving but have limited amounts of money. Round-up accounts, for instance, can force you to save money in a way that cash-back accounts do not, and they pay you interest. (But again — read the small print!)
And for dessert …
A conspiracy theory about Taylor Swift says the Pentagon wants the Kansas City Chiefs to win the Super Bowl because (checks notes) the singer’s boyfriend is pro-vaccination and she’ll endorse Biden for president. It’s as bizarre as it sounds.
A judge cancelled Elon Musk’s $56 billion pay package with Tesla. A few years ago, Musk made a bet with the car company he runs, Tesla: He agreed to take no salary but if he could boost Tesla’s stock price he would receive a massive stock payout. Tesla’s market cap went from $53 billion to a peak of $1.2 trillion, and investors would have made 1,000% on Musk’s bet. But a judge cancelled the $56 billion award saying it was unnecessary.
BBC edited an episode of Dragon’s Den after investor Steven Bartlett backed a cure for myalgic encephalomyelitis that involved putting gold seeds into your ears. Gold seeds don’t cure ME, in case that isn’t clear.
Ex-Goldman Sachs exec is struggling to get by on $230,000 a year. He’s looking for a new job.
George Osborne joined crypto trading platform Coinbase as an adviser. The former chancellor and podcaster is also a partner at the boutique investment bank adviser Robey Warshaw.
Easyjet is offering free holidays for grandparents. To qualify, they must travel with a family that includes one child. Numbers are limited.
Austin, Texas, tried a guaranteed basic income experiment in which recipients received $1,000 (£790) a month, free. Most of it was spent on rent.
Scotland introduced an emergency freeze on rents - and then rents went up. “The Scottish Government recognised the potential for some unintended consequences,” according to a new proposal, and the government is now trying to figure out how to transition out of the experiment.
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Photos by SurveyHacks; Time; GoSimpleTax; Jacqueline Lin via Giphy.