Credit Card News
Advertising Disclosure
Credit-Land.com is an independent, advertising-supported web site. Credit-Land.com receives compensation from many credit card issuers whose offers appear on our site. Compensation from our advertising partners impacts how and where their products appear on our site, including, for example, the order in which they may appear within review lists. Credit-Land.com has not reviewed all available credit card offers in the marketplace.
Credit Card Applications » News » Products » The numerous problems with credit card rewards

The numerous problems with credit card rewards

By
Add to Favorites:
The numerous problems with credit card rewards

Most of the credit cards that offer rewards have one thing in common, which is, they get customers into bigger debt when not used properly. Many credit card reward programs, including the frequent flyer miles, and general rewards on credit cards such as, discount vouchers, instant reward points and cash back schemes may seem profitable. These rewards however may not be as valuable, if one doesn’t use the credit card very often and if it is not the preferred mode of payment.


The credit card rewards according to many experts in the industry work as a luring device to make credit card customers spend more rather than saving .In fact, if credit card customers don’t clear the debt on time, they could find themselves in some serious debt. Therefore one thing which is most important is that credit card customers have to be much disciplined when it comes to making repayments on their expenses. One of the main issues with not repaying on time, is the high interest rates charged on credit card debt.


In general, credit card rewards usually bring higher interest rates than the non-reward credit cards. The difference in interest rate could be as high as 5% ; credit cards with greater rewards, come with a higher annual fee. In fact, customers who are having trouble paying off the debt on their credit cards in full, the extra interest, annual fees and late charges could easily overweigh the savings made by the credit card customers.


A better strategy would be to let go of credit cards with reward programs and instead choose credit cards with a low APR or interest rate. Even if credit card holders want to pick reward cards, it is a better option to pick cards with profitable reward schemes from the customers’ usage point of view rather than picking up rewards which are considered good. For example, customers’ who don’t travel often cannot benefit from a credit card which offers the best travel rewards amongst all cards. Such customers might benefit from cash back schemes instead.

Add to Favorites:

Related News:

Global Fraud On Hackers To-Do List This Season

By Dar Dowling, Posted: December 2, 2016

With the holiday shopping season upon us, retailers around the world can expect a 12% bump in online fraud when compared with data from the holiday season last year. Continue reading
Chase Pay Launched

By Dar Dowling, Posted: December 1, 2016

Chase Pay, the new digital payment system from Chase, is now open for business. Chase Pay lets people pay for purchases with their credit cards. Continue reading
Blowing The Holiday Budget is a Holiday Tradition

By Dar Dowling, Posted: November 30, 2016

If year after year you find your self overspending at holiday time you are not alone, with eight out of 10 consumers (78%) indicating that they are in the same boat. Continue reading
Get the latest news, articles and expert advice delivered to your inbox. It's FREE.
Get 0% Intro APR on Balance Transfers and Purchases for 21 months. After that, the APR will be 12.24%-22.24% based upon your creditworthiness.
For Excellent/Good Credit
Earn 1% cash back on gas and grocery purchases. Terms apply.
For Fair Credit
Guaranteed $500 Unsecured Credit Limit
For Bad Credit