Credit Cards Offer Rewards

There are several credit cards available that offer many types of "rewards"  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 gasoline credit cards, air miles and discounts off the costs of flights.Some retailers and stores offer “loyalty” rewards when a card which was issued in their name is used for purchases, and you can even earn discounts with some credit cards to put toward the purchase of a new car. 

You should be asking yourself if these rewards are worth spending money in order to obtain them, in spite of  how desirable they may seem to be.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.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 going 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 included with an introductory offer on some other credit cards.The interest rate on some of the credit cards which offerrewards can be as much as 30% APR; you will find this out if a comparison of the interest rates on the broad range of these cards is done.

A regular credit card user who wants to earn sufficient points for worthwhile rewards, but has to pay interest at these sort of rates, may find it to 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, the rewards for using the card are actually free because you are not paying interest then.

Unless you are sure that you can pay off all of the total balance on your credit card every month, you may need to use an alternative such as the cash back credit cards.Similar in principle concept to the reward credit card, a cash-back card pays back cash equivalent to a preset percentage of whatever has been spent on the card each month.     

The best cash back rate is currently around 5% on what is spent, and with a 19% APR in interest it becomes very obvious that you are paying a lot to be able to use 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.   

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 the balance on your card, before it starts to attract interest.When used in this way, these credit cards can be very beneficial to your personal finances.