That’s a fair point, I’m glad you raised this
It sounds like we agree that the result of using the targets or getting cashback is that you save money.
The assumption is, you should be able to spend less & earn cashback at the same time, right? So if the two methods of saving aren’t mutually exclusive, then there’s not a trade off between one or the other…
Here’s the thing, according to a study by an American bank, people who earn cashback on their purchases spend more than those who don’t -
The initiation of a 1% cash rewards program yielded, on average, a $25 reward each month — and an increase in spending by $68 a month and in credit-card debt of $115 a month
cashback is a really clever concept because it shifts user’s focus from how much they’re spending to how much they’re “earning” or saving while spending (& funnily enough, that’s beneficial for the credit card providers). On the other hand, the targets focus the user’s attention on how much they have left to spend before they exceed their target which makes the user weigh up whether the purchase is worth it or not.
There will be exceptions to that rule but unless you’ve checked carefully, the chances are, it’s not you - nothing personal, I don’t trust myself to make a casual accurate assessment of my own spending either.
Just to point out - that’s £12.50 a month so definitely within range of what I save each month by using the targets. As I’ve mentioned earlier in this topic, I’m not sure that Monzo can compete with Amex’s exceptionally high rewards but another user recently mentioned that they think it does.
So while you may not have a problem with self control or out of control spending, the chances are you do buy a few ‘nice to haves’ each month. There’s nothing wrong with that but since I can see how that adds up, thanks to Monzo, I’ve decided to try to save that money instead & I’m hopeful that other users will do the same.
Having said all that, I’ve not had a chance to sound out these thoughts with anyone else so if I’m missing something, please do point it out!