Credit and credit cards are a key to financial power and success, but they aren’t always everything they’re cracked up to be. One area where you might not be getting everything you think is with your rewards credit cards.
While you can certainly get cash back and perks with these, they aren’t always the best deal for every consumer. In some cases, payday loans can even help you out in a pinch a lot better than your credit cards.
Use this guide to learn more about why your rewards credit cards may not be your best bet and why payday loans can even be more helpful than spending on a card when you’re in a pinch.
You Don’t Spend Enough Most rewards credit cards come with an annual fee that you need to pay. While annual fees aren’t anything new, rewards cards can easily charge more than $50 per year, making them some of the steepest out there.
That means that if you don’t spend a certain amount of money each year to get at least $50 in cash back rewards your card could be costing you more money than you’re spending. Pair that with an interest rate that is just about standard and you could actually be losing money if you don’t use your rewards credit card all the time.
High Interest Rate Many rewards credit cards have a fairly standard interest rate. However, not all of them do, and if you’ve got a rewards credit card with a high-interest rate and you don’t pay the balance you could be spending a lot on small purchases.
The worst part is that you could be spending a whole lot of money on small purchases if you don’t pay your bills completely each month. Holding a balance for a long period of time – especially if it’s a high balance – can really cost you money.
Even worse, not paying on time or at all can damage your credit very quickly. In these cases it’s better to get a payday loan with more flexible repayment terms to avoid credit damage.