When credit cards offer “rewards” to their cardholders, it is done in connection with the number of purchases the customer makes with the card.The credit card rewards offered come in an almost endless variety with some of the most popular ones being air miles and discounts off the costs of flights.”Loyalty” rewards are being offered by some stores and retailers when a card issued in their name is used, and it is possible to earn discounts toward the purchase price of a new car.  

However desirable some of the rewards offered by some credit cards might be, the question that must be asked is whether or not these rewards are worth it.For the answer to this question, it is instructive to look at the rate of interest applied to purchases made on credit cards with rewards and compare them to those without 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.This interest rate is much more than the zero percent interest rate on the introductory offers of many other credit cards and about 7-8% more than the interest rate of a basic low-interest credit card.When you do a comparison of all of the interest rates on the whole range of credit cards it will show that some of them exceed over 30% APR.

It may be worth reconsidering the choice of a credit card that has a lower interest rate and no rewards, if you are a regular credit card user who has to pay these higher interest rates in order to earn sufficient points for desired rewards.The kind of credit card user who pays off their total card balance before the payment due date and never has to pay interest, will actually receive the rewards for using their card for free.If you are not sure if you can maintain the discipline of paying off the total balance on your credit card each month, then an alternative worth considering is the cash-back credit card.Similar in principle concept to the reward credit card, a cash-back card pays back, in cash, a preset percentage of whatever has been spent on the card each month.      

Since the best current cash back rate is in the area which runs about 5% and the spending you do on the card attracts around 19% APR in  interest, you will unfortunately end up paying quite a lot for the use of the card.You will be able to retrieve for your own pocket the 5% cash back on this card when you pay your total balance each month and avoid the interest charges.    

It can certainly be worthwhile to you if you use the cash back credit cards and those that offer rewards if you keep paying your monthly outstanding balances consistently and avoid the interest that will be charged.It could be of benefit to your finances to use the credit cards that offer cash back or rewards and you consistently repay the balances on them each time to avoid the interest charge.