Credit Card Rewards Are Very Useful

The credit cards which offer “rewards” are willing to do this by keeping track of the number of purchases for which the cards are used.The credit card rewards offered come in an almost endless variety with some of the most popular ones being air miles and discounts off the costs of flights.It is possible to earn discount points toward the purchase of a new car, and there are some retailers and stores which give you loyalty rewards for using a card issued in their name.  

You should be asking yourself if these rewards are worth it, in spite of  how desirable they may be.For the answer to this question, it is instructive to look at the rate of interest applied to purchases made on credit cards with rewards and compare them to those without rewards.The lowest rate of interest on these types of cards is usually about 15% APR even though there are several credit cards that offer some kind of  loyalty bonus or reward.This is about 7-8% more in interest than you would pay for a very basic, low-interest credit card and infinitely greater, of course, than you would be paying on the zero-percent rate of interest on the introductory offer with many other credit cards.When you do a comparison of all of the interest rates on the whole range of credit cards it will show that some of them exceed over 30% APR.

If your credit card is one of those that has these higher rates of interest and you are using it to earn enough points to get the types of rewards you want, it may be a better idea to switch to a lower interest credit card and save money instead of reward points.The kind of credit card user who pays off their total card balance before the payment due date and never has to pay interest, will actually receive the rewards for using their card for free.Unless you are sure that you can pay off all of the total balance on your credit card every month, you may want to use an alternative such as the cash back credit card.The cash back credit card gives back cash to you according what has been spent on the card each month and the reward credit card also works on this principally in the same manner.      

Since the best current cash back rate is in the area which runs about 5% and the spending you do on the card attracts around 19% APR in  interest, you will unfortunately end up paying quite a lot for the use of the card.The interest charges can be avoided and the 5% cash back can be put into your own pocket if you are one of the consumers who is in the habit of paying all of your outstanding balances each month.    

It can certainly be worthwhile to you if you use the cash back credit cards and those that offer rewards if you keep paying your monthly outstanding balances consistently and avoid the interest that will be charged.Your personal financial picture may be given a brighter focus when you are using these cards that offer rewards and cash back.