Question: Is It Worth Having a Credit Card to Earn the Rewards?
Credit card rewards are one way that credit card companies entice people to sign up to use their credit cards. There are some great rewards offered, free trips, discounts on purchases and cash back. It is important to realize that credit card companies are in the business of making money and not in the business to help the customer. They do not offer the rewards and plan on losing money on them. Many people think of credit cards as bad, but they can be a useful tool if managed properly.
If you do not pay off your card in full each month, the rewards are not worth having a credit card. For example, on a cash back card you can earn between one to five percent back on each purchase made. If you have a normal credit card with an interest rate of ten percent and even carry the balance over for two months you more than pay for that five percent back. It would save you money to pay cash and not be charged the interest.
Another thing to consider is the annual fee that you are charged for having a credit card. There are so many competing credit card companies, that you should consider switching to a card without a fee. There is no need to pay a fee on a credit card at anytime.
If you are faithful in paying off your balance in full each month, then a cash back or a rewards credit card may be worth the extra money that you earn. Some people earn up to three or four hundred dollars a year on their cards. It is also important to read the fine print if you have a rewards card to be sure that you can actually use the reward you are trying to earn. However, that is only if you are already sticking to your budget and truly paying your balance off in full each month. Otherwise, you really are not getting the deal that you think you are. YOu need to be financially ready to handle a credit card before you will be able to benefit from a rewards card.
Reward credit cards are used to encourage people to put money on their credit cards in order to earn the rewards. When people spend with credit they tend to overspend. Reward credit cards are on the best ways that credit card companies have to encourage people to keep spending money on their credit cards. If you currently have a large amount of credit card debt, you should stop putting things on your card until you have paid it off completely. Once you have done this, you may consider using it for the rewards, as long as you pay off the balance in full each month.
You need to get on a budget and stop using your credit card completely before you start to use it for rewards. This will help you develop the self-control and budgeting know-how to prevent the credit cards from becoming a problem in the future. A debt payment plan will help you pay off your debt more quickly and save on interest. Once you stop paying interest on your credit cards, you may be able to benefit from the rewards on your credit cards.