Credit Cards! Freebies! Why?

You are paying for it that is why. Remember, credit card companies are in the business of making money not losing it. Have you ever wondered why instead of given rewards, they just don't reduce interest rates? Well, it is much cheaper to give rewards than reduce your interest rates. Think about it how many points do you have to rack up to redeem one of your prizes? In other words, how much money do you have to spend before you get your reward?

Reward credit cards have high annual fees. Refer to Fees to understand annual fees. These cards also have high interest variable rates. You may have a low introductory rate or no introductory rate but it rises dramatically once your introductory period is over. Reward credit cards also have reward limitations. Some reward programs are limited to a maximum amount. In other words some cards may give you a 2 % rebate up to $2500, after that all you are stuck with are high annual fees and high variable interest rates. There are also time limitations on redeeming your rewards. If you can’t redeem, you forfeit. Again you are left with high annual and variable interest rates. If you default on payment, you forfeit your prize. If you do apply for a reward credit card, ensure to read the Terms and Conditions as companies will not openly state the limitations of their credit cards.

As stated in the article The Rewards of Credit Cards if you pay your fees on time, avoid interest rates, and pick a card with no annual fee these rewards may be worth it.