ADVERTISER DISCLOSURE
AcclaimVisa.com is an independent, advertising-supported web site. AcclaimVisa.com is compensated by the credit card issuers whose offers appear on our site. This compensation can impact how and where credit products appear on our site, including, for example, the order in which they may appear within product listings. AcclaimVisa.com does not offer, review or present all available credit offers.

Study Claims Credit Card Rewards Only Pay Off for High Spenders

[Monday, October 21st, 2013]

Credit card rewards may not be worth much if you aren’t a big spender, according to a new study out of Australia.

A finance website compared 67 credit cards that offer rewards and said that only five of them gave cardholders more than $100 in value each year. Reasoning that many people pay more than that in interest and annual fees, the director of the site advised consumers that unless they are high spenders they should forget the idea of rewards credit cards.

However, the study did not take into account that many people pay off their credit cards in full each month, effectively avoiding any interest charges. Also, there are plenty of credit cards available without fees. In fact, over the past year the trend in credit cards has been for no-fee cards that do not even charge for late payments or going over the credit limit—at least the first time it happens.

When cardholders stick to the terms and conditions of their credit card agreements and pay the whole balance off each month, they can avoid paying fees or accruing interest. That means even $100 in credit card rewards is worth it.

Also, if people do use their cards more often, they will earn higher rewards. The key is to find a card that pays the biggest rewards for the category that people use the most. Someone with a long car commute will get more value from a gas rewards credit card that gives 3% back on all purchases at the pump, while someone who flies often for work can get bonus frequent flyer miles with a co-branded airline card.

People do not necessarily have to be high spenders to get something from their credit card rewards. As long as they use their card on a regular basis they will be able to get a percentage of their spending back, either as cash, points or miles.

Finance experts emphasize that if people are trying to get out of debt, they should not be lulled into using their credit cards for the rewards. If cardholders have a balance that is gathering interest, then putting more charges on the card will not be worth any rewards gained. Further, it will slow the pace of paying off the debt. In that case, even a high spender will not get any reward from credit card rewards.

Copyright © 2006-2017
AcclaimVisa.com.
All Rights Reserved

AcclaimVisa.com is an independent, advertising-supported web site. AcclaimVisa.com is compensated by the credit card issuers whose offers appear on our site. This compensation can impact how and where credit products appear on our site, including, for example, the order in which they may appear within product listings. AcclaimVisa.com does not offer, review or present all available credit offers.

All the credit card information presented without warranty and can change. To confirm the terms and conditions click the "Apply Now!" button and review the current information on a secure credit card terms page. AcclaimVisa.com can be compensated by the credit card issuers when visitors apply for a credit card through this website.

* The acclaimvisa.com webpage is a free service and an information resource for credit cards and financial products and services available to eligible United States consumers. acclaimvisa.com does not offer any warranties and is not a direct service. There are no guarantees for approval or offers when applying for a credit card. Please refer to the application if you would like more information on each credit card. When you click "Apply" for a particular credit card, please take the time to review the terms and conditions of the product/service at the issuer's website. All logos on the acclaimvisa.com website are property of their respective owners.