Credit Card Rewards Are Very Beneficial

When credit cards offer “rewards” to their cardholders, it is done in connection with the number of purchases the customer makes with the card.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.”Loyalty” rewards are being offered by some stores and retailers when a card issued in their name is used, and it is possible to earn discounts toward the purchase price of a new car.  

As desirable as these cards may seem to be, it is still necessary to question whether or not they are worth it.You can answer this question for yourself by making comparisons between the interest rates on purchases made with cards having rewards and cards that do not have 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.

In case you are a regular credit card user who earns sufficient rewards and you are paying interest at these kinds of rates, it may worthwhile for you to consider 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.You may want to consider the alternate choice of the cash-back credit card if you are not sure you can maintain the discipline of paying off the whole balance of your credit card each month.The cash back credit card pays back in cash, a certain percentage of what has been spent on the credit card each month, and this makes it function quite in the same nature as the reward credit card.      

The best cash back rate is currently around 5% on what is spent, and with 19% APR in interest it becomes very obvious that you are paying a lot to be able to use the card.You will be able to retrieve for your own pocket the 5% cash back on this card when you pay your total balance each month and avoid the interest charges.    

Credit cards with rewards and their family members, cash back credit cards can therefore, be worth it, when you are maintaining a personal policy of repaying any balance on the card, before it starts to attract interest.If you use the cash back and rewards credit cards in this manner you can put cash into your own pocket and accumulate the necessary reward points to help you acquire a wanted or needed item.