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Credit Card Rewards Are Very Useful Sponsored Links

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.

By Alisdair Cosgrove
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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.Popular rewards offered are air miles or discounts off the cost of airline flights, but the variety of credit card rewards which are available is practically endless.Many stores and retailers also offer "loyalty" rewards if you are using a credit card issued in their name and some credit cards will give the opportunity to earn discounts on the purchase of a new car.

You should be asking yourself if these rewards are worth it, in spite of how desirable they may be.If you make a comparison of the interest charged on purchases made with the cards that have rewards and the ones that do not, you can answer this question easier.Although there are any number of cards offering some sort of reward or loyalty bonus, the lowest rate of interest on such a card is likely to be in the region of 15% APR.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.Across the whole range of reward cards, the interest rate comparison becomes even more alarming, with some interest rates exceeding well over 30% APR.

If you are a regular credit card user who wants to earn sufficient points for worthwhile rewards and have to pay interest at these sort of rates, then it would certainly be worth giving serious consideration toward choosing a much lower-interest credit card which does not offer rewards.If you pay off the whole balance on your credit card before payment is due, and so you really never have to pay interest, the rewards for using the card are actually free.It takes a great deal of discipline to pay off the balance on your credit card each month and if you do not know if you can do this it may better for you to choose to use a cash back credit card.Similar in principle concept to the reward credit card, a cash-back card pays back, in cash, a preset percentage of whatever has been spent on the card each month.

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.If you are in the habit of repaying outstanding balances each month to avoid having to pay interest, you will be able to pocket this very welcome 5% cash back.

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.It could be of benefit to your finances to use the credit cards that offer cash back or rewards and you consistently repay the balances on them each time to avoid the interest charge. Alisdair Cosgrove is a freelance writer specializing in personal finance. You can read more of his work at www.JSNet.org for credit card comparisons including cash back credit cards and also offers a comprehensive list of airline credit cards. You can read more about credit cards from his on site article, 'searching for the best credit card offer'.

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