Credit Card Rewards Are Great

There are credit cards available that offer all sorts of "rewards" based on how often they are used to make purchases.Some of the most popular rewards are air miles and discounts off the cost of flights, however the variety of rewards offered is nearly endless.Many stores and retailers also offer "loyalty" rewards for using a credit card issued in their name and some cards will even earn you 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.If you make a comparison of the interest charged on purchases made with the cards that have rewards and the ones that do not, you can answer this question easier.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.The interest rate on some of the reward cards can be as much as 30% APR, this will be discovered if a comparison of the interest rates on the broad range of these cards is done.

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.You may want to consider the alternative 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 according what has been spent on the card each month and the reward credit card also works on this principal.

The best cash back rate is currently around 5% on what is spent and with 19% APR in interest it becomes very clear that you are paying a lot 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.Your personal financial picture may be given a brighter focus when you are using these cards that offer rewards and cash back and you are paying the balances on them each time to keep from paying interest charges.

Article Source: http://www.articlemonk.com

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 0% balance transfers for UK residents and also a great selection of articles including 'rewards or cash back?' and also 'search for the best credit card'.

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