Giving up your Rewards Credit Card

Reward credit cards offer consumers some great incentives for spending on their credit cards. With most of us using our credit cards for the majority of our purchases, surely a rewards card makes sense. By spending on our credit cards we can earn points and redeem them for a wide range of goods and services.

So when is a rewards credit card not such a good choice? If you have a rewards credit cards and do not pay off your balance in full each month, then you need to carefully monitor you’re spending and repayment habits. You may find that any reward benefits you are receiving are negated by the interest charges you are paying.

Generally, a reward credit card will have a higher interest rate and higher annual fees than other types of credit cards.

To determine whether you’re getting a good deal from your rewards credit card, you should answer the following questions:

• How much is the Annual Fee for my credit card?
• What is my current interest rate?
• Add up your interest charges over a 12 month period
• Make a list of any rewards you have claimed

We all lead such busy lives that we often don’t have time to stop and question whether we’re getting the best deals. If you’re not clearing your balance each month, see how much you’re paying in interest charges. Chances are that the rewards you are receiving will be negated by your interest charges.

If you are constantly have an unpaid credit card balance and are paying high interest, you would probably be better off applying for a good low rate credit card. Sure you will not be getting the rewards, but you also will not be paying such high interest payments.

Giving up your rewards credit card can be hard. Many people find it difficult to let go, even when they know they will end up paying more just to get the rewards. Making a list can help you to put it all into perspective. You will be able to see clearly, just how much you’re paying out for your rewards and whether it’s worth it.

The best way is to compare credit cards to find the best credit card for you.