May 19, 2010
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News: Beware Of CC Rewards Offers
If you're looking for the best credit card rewards card, Consumer Reports has some advice for you. In its most recent publication, Consumer Reports warns consumers that what they think is the best credit card rewards may actually be costing them more money than their worth. Cardholders are warned that most card rewards program carry a higher interest rate. Therefore, unless the consumer pays the card's balance off in full each month, they should stay clear of a rewards credit card. Furthermore, these types of cards also come with an annual fee. You can do the math; after adding up higher interest and annual fees and the cost will far outweigh the rewards.
Consumer Reports also warns credit cardholders to be aware of other hidden fees such as balance transfer fees. These fees typically cost anywhere from 3 percent to 5 percent.. If you plan on paying the balance off within the balance transfer promotional period, these kinds of deal can be beneficial, and however, if you expect to carry a large balance forward, you could end up paying more in interest than you saved during the promotional period. Of course, typically the most costly interest is associated with the cash advance. Most experts agree that using your credit card for cash advances is not a prudent decision. Cardholders should also be aware of the high cost associated with overseas purchases.
To get the most for your spending, credit cardholders are advised to secure a card that offers cash rewards versus points that are used to purchase products that the consumer would never have purchased if it weren't to use up the rewards points. Citibank offers this type of card. Although easy to rack up rewards points, most of the products that are offered on the banks “extra cash rewards” website are not practical or useful to the average cardholder.