Olde Hornet
Well-Known Member
The No. 1 mistake people make with their cash-back credit cards
www.cnbc.com
Cash-back credit cards are pretty easy to use, and that’s a big reason why many Americans report having at least one.
But there is one major mistake you can make with these credit cards that can end up costing you in the long run: not paying off your balance in full every month.
Nearly half, 47%, of Americans carry a monthly balance on their credit cards, according to a recent survey of 1,000 credit card users by real estate data company Clever. Of those, over 70% say their balance is more than $1,000 on average.
That can be a significant expense, especially since the average APR among credit cards that charge interest is 17.14% as of June 2019, according to the U.S. Federal Reserve.
And it can be worse if you’re using a cash-back card, which is considered a “rewards” credit card because you earn a bonus on your spending. These types of credit cards tend to have higher interest rates, on average, than others.
Anyone who carries a balance, even occasionally, should prioritize their interest rate over rewards. If you’re struggling to pay off debt, that may mean avoiding credit cards entirely and sticking to debit and cash
The No. 1 mistake people make with their cash-back credit cards
Cash-back credit cards are easy to use and earn rewards, but there's one big mistake that people make that can wipe out any savings these cards provide.
Cash-back credit cards are pretty easy to use, and that’s a big reason why many Americans report having at least one.
But there is one major mistake you can make with these credit cards that can end up costing you in the long run: not paying off your balance in full every month.
Nearly half, 47%, of Americans carry a monthly balance on their credit cards, according to a recent survey of 1,000 credit card users by real estate data company Clever. Of those, over 70% say their balance is more than $1,000 on average.
That can be a significant expense, especially since the average APR among credit cards that charge interest is 17.14% as of June 2019, according to the U.S. Federal Reserve.
And it can be worse if you’re using a cash-back card, which is considered a “rewards” credit card because you earn a bonus on your spending. These types of credit cards tend to have higher interest rates, on average, than others.
Anyone who carries a balance, even occasionally, should prioritize their interest rate over rewards. If you’re struggling to pay off debt, that may mean avoiding credit cards entirely and sticking to debit and cash