When credit cards offer “rewards” to their cardholders, this is done according to 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 gasoline credit cards, air miles and discounts off the costs of flights.Some retailers and stores offer “loyalty” rewards when a card which was issued in their name is used for purchases, and you can even earn discounts with some credit cards to put toward the purchase of a new car. 

You should be asking yourself if these rewards are worth spending money in order to obtain them, in spite of  how desirable they may seem to be.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 easily answer this question for yourself.The lowest rate of interest on this type of credit card is usually about 15% APR even though there are several cards that offer some kind of  loyalty bonus or reward.

This will be about 7-8% more in interest than you would pay for a very basic, low-interest credit card and infinitely greater, of course, than you would be paying on the zero-percent rate of interest on the introductory offer with some credit cards.When you examine the whole assortment of credit cards offering rewards, you will find that the interest rates on some will be well 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 will not have to pay interest, will actually receive the rewards for using their card for free.

Unless you are sure that you can pay off all of the total balance on your credit card every month, you may need to use an alternative such as the cash back credit cards.The cash back credit card pays back a cash amount according to a certain percentage of what has been spent on the credit card each month, and this makes it function much in the same nature as the reward credit card.     

The best cash back rate is currently around 5% on what is spent, and with a 19% APR in interest it becomes very obvious that you are paying a lot to be able to use 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.   

If you intend to maintain a strict personal practice of repaying your balances every month to avoid paying interest, it may be a wise practice to use the credit cards that have cash back and rewards attached to some of them.When used in this way, these credit cards can be very beneficial to your personal finances.