What's So Great About Credit Card Rewards

By Author: Alisdair Cosgrove
Total Articles: 184
Comment this article

There are credit cards available that offer all sorts of "rewards" based on how often they are used to make purchases.The rewards offered come in an almost endless variety and some of the popular ones are air miles and discounts off the costs of flights.Loyalty rewards are offered by some stores and retailers when a card issued in their name is used and it is possible to earn discounts on the purchase of a new car.

Desirable though these cards may be it is necessary to question whether or not they are worth it.In an effort to answer this question it is helpful to compare the rate of interest charged on purchases made with cards that offer rewards with those 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 cards that offer some kind of loyalty bonus or reward.This interest rate is about 7-8% more than you would have to pay for a basic low-interest credit card and much more than the zero percent interest rate on an introductory offer on many other credit cards.Across the whole range of reward cards, the interest rate comparison becomes ...
... even more alarming, with some exceeding well over 30% APR.

If you were a regular credit card user to earn sufficient points for worthwhile rewards and paid interest at these sort of rates, then it would certainly be worth giving serious consideration to choosing a much lower-interest credit card that does not offer rewards.If you are the kind of credit card user who always pays off the whole balance on the card before payment is due, and who therefore never pays any interest, the rewards for using the card are genuinely 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 to use the alternative of a cash back credit card.The cash back credit card gives back cash according what has been spent on the card each month and the reward credit card also works on this principal.

With the best cash-back rate currently running at around 5% on spending that attracts almost 19% APR in interest, it is clear that you will still be paying quite handsomely for the use of the card.{{{If you are in the habit of repaying outside balances and avoiding having to pay interest, you will be able to pocket this very handy 5% cash back|When you develop the habit of paying all of your outstanding balances each month to avoid paying interest, you can of course, put the 5% cash back into your own pocket|You will be able to pocket the 5% cash back on this card when you pay your total balance each month and avoid the interest charges|These interest charges can be avoided and the cash back can be put into your 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 use the cash back credit cards and those that offer rewards if you are going to keep paying your monthly outstanding balances consistently and avoid the interest that will be charged.When used in this way, these credit cards that offer to put cash back into your pocket and rewards to help you obtain a chosen item can
be very beneficial to your personal finances.
Alisdair Cosgrove has been writing credit card articles for many years and can find more of his work at the UK site TheMoneyStop.co.uk, offering credit card rewards for UK residents and also a great selection of articles including 'what is your choice - cashback or rewards?' and also 'different credit card types'.