If You Use Your Credit Card A Lot, This Can Add Up Pretty Nicely

Category: Finance, Credit.

It feels great when you get money back from using your credit cards. Is that really a good thing?

It gives you a reason to use them and you feel as though you are benefitting from shopping as you would anyhow. Perhaps, perhaps not. Cash rewards credit cards pay you back a percentage of what you spend on them. That depends on you. Basic purchases generally have up to 1% cash back, while other purchases may get 5% or more back, depending on the terms of the card. But that does not mean it's worth it. If you use your credit card a lot, this can add up pretty nicely.

Why Not? Effectively, this takes back some of the cash rewards you would otherwise be getting. The first reason cash rewards may not be worth it for you is if the card charges an annual fee. A high annual fee is rarely worth it, especially if you only use your credit card minimally. This doesn' t really matter if you are not carrying a balance, but if you do carry a balance it can be a big deal. The second reason is that the interest rate you get is generally higher than you would be paying on a plain credit card, often by several percent. What About When It Is Worth It?

The first is what it takes to get the best rewards. If a cash rewards credit card is right for you and your spending habits there are a few things you want to look out for, beyond the interest rate and/ or annual fees. That" up to" 1% for most purchases- how do you get there? You will also know what maxes out your rewards. Is it within the range you are likely to spend? Some cards only allow you to get a certain amount of rebate back each year. When you are thinking about applying for a card, compare the various benefits of each.

You want to get your rewards for all your purchases, so make sure you pick a card that will give them to you. This will help you to decide which has the benefits that are right for you. That little bit of extra time spent choosing can save you money and allow you to earn more rewards. What appears to be the best card at first glance may not best suit you when you look more carefully. It is very much worth it.