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.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.
These rewards offered by credit cards can be very desirable to have, but you should ask yourself the question as to whether 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.There is a great number of rewards credit cards that offer some sort of reward or loyalty bonus, but the lowest rate of interest on these cards is likely to be in the area of 15% APR.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.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 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.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.If you are not sure if you can maintain the discipline of paying off the total balance on your credit card each month, then an alternative worth considering is the 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.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.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.