Are rewards credit cards actually worth it?

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Having rewards credit cards is seen as a big plus by a lot of people, especially during the holiday season, when everybody is constantly after the best gifts. Actually, according to an estimate, by December 31, the total credit card debt in the United States will reach $905 billion.

During the same period, owners are also looking forward to stacking more points on their rewards credit cards. But is it actually worth running after rewards all the time?

Here are a few secrets you should know about:

Not all airline credit cards are that helpful

Keeping a credit card in order to acquire miles is what motivates a lot of owners, but there are a few catches to this as well, starting with the annual fees.

For example, if you get one mileage point for every dollar you spend and your card has an annual fee of $100, while the amount you charge every year is $10,000, you’ll need around two and a half years in order to get one coast-to-coast ticket. The latter is usually worth 25,000 mileage point.

Until then, you’ll have spent $300 in annual fees. And a ticket is less than this. So is it worth it?

Not all cashback cards give you actual cash back

Sure, these can be tempting as well, but the idea is that you need to spend a lot on a credit card, in order to get at least $100 cash back. And let’s not forget about that annual fee. Is this reward enough just to cover your annual fee?

Besides this, some cards give you cash back just on gas or dining, while other types of transactions are limited.

Store cards don’t offer the best rewards

Most cards of this type offer around 30-40 percent off if you charge your purchases on it, while others expand this offer to free shipping twice a year or a 20 percent off coupon every month.

But hey, let’s not forget that you also need to spend a minimum amount when shopping, in order to benefit from these. In this case, is it worth signing up for one?

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