Credit Card Rewards Are Very Useful

By Author: Alisdair Cosgrove
Total Articles: 184
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You will find that there are several credit cards available that offer all sorts of "rewards" which are based on how often the cards are used to make any type of purchase.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.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 cards that offer some kind of loyalty bonus or reward.This interest rate is much more than the zero percent interest rate on the introductory offers of many other credit cards and about 7-8% more than the interest rate of a basic low-interest credit ...
... card.When you examine the whole assortment of credit cards that offer rewards you will find that the interest rates on some will be well 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.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 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.

The best cash-back rate is currently running at around 5% on spending that attracts almost 19% APR in interest, it is easy to see that you will still be paying quite dearly 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.

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.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 travel rewards credit cards. You can read more about credit cards from his on site article, 'Credit cards safer than checks?'.