What’s So Great About Credit Card Rewards
The credit cards which offer “rewards” do this according to the number of purchases the cards are used on.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.”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.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.A basic low interest credit card has an interest rate about 7-8% lower than this and the zero interest rate on many
other credit cards is very much lower than this type of card.When you examine the whole range of reward cards you will find that the interest rates on some will be 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.The rewards for using a credit card will be free to someone who pays off their total credit card balance each time before the payment is due and never has to pay interest.If you are not sure whether you can maintain the discipline of paying off the whole balance on your credit card each month, then an alternative worth considering is the cash-back credit card.The cash back credit card pays back in cash, a certain percentage of what has been spent on the credit card each month, so this makes it similar in principal to the reward credit card.
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 monthIf you intend to maintain a strict personal practice of repaying your balances every month to avoid paying interest, it may be a wise choice to use the credit cards that have cash back and rewards attached to some of them.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.
By: Alisdair Cosgrove
Article Directory: http://www.articledashboard.com
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