Loan and Equity Help

The “rewards” a cardholder receives from the credit card’s issuer are presented according to the number of purchases the cardholder makes with the card.The variety of rewards offered by credit card companies is virtually endless, with some of the popular rewards being air miles or discounts off of the cost of certain airline’s 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 credit 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 the credit cards with rewards and the zero interest rate on many other credit cards is very much lower than this type of card.Across the whole range of reward cards, the interest rate comparison becomes even more alarming, with some interest rates exceeding 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.If you pay off the whole balance on your credit card before payment is due, and so you really never have to pay interest, the rewards for using the card are actually free.It takes a great deal of discipline to pay off the balance on your credit card each month and if you do not know if you can do this it may better for you to choose to use a cash back credit card.The way the cash back credit card works, is to pay cash back to the card user in accordance to what is spent on the card each month and this is also the same basic working principal of the credit cards that offer rewards.      

You will be paying an excessive amount for the use of a cash back credit card, if the amount you spend attracts the 19% APR in interest and the current best cash back rate is somewhere around 5 percent on the spent amount.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.    

The gas credit cards that rebates in your gas or other cards that offer rewards or cash back can be worth using if you stay with a strict rule of repaying any outstanding balances before they are due and therefore, avoid paying interest charges.Your personal financial picture may be given a brighter focus when you are using these cards that offer rewards and cash back.