Credits cards are available that offer all sorts of "rewards" according to how often they are used to make purchases. Popular rewards are airmiles or discounts off the cost of flights, but the variety is practically endless, with many stores and retailers also offering "loyalty" rewards for using a credit card issued in their name. Some cards will even earn you discounts on the purchase of a new car.

However desirable some of the rewards might be, though, the question is whether they are worth it. For the answer to this question, it is instructive to look at the rate of interest applied to purchases made on credit cards with rewards and compare them to those without. Although there are any number of cards offering some sort of reward or loyalty bonus, the lowest rate of interest on such a card is likely to be in the region of 15% APR. This is some 7-8% more in interest than you would pay for a very basic, low-interest credit card and infinitely greater, of course, than you could enjoy on the zero-percent rate of interest on introductory offer with many other credit cards. Across the whole range of reward cards, moreover, the interest rate comparison becomes even more alarming, with some exceeding well over 30% APR.

If you are a regular credit card users (which you would need to be to earn sufficient points for worthwhile rewards) and paid interest at these sort of rates, then it would certainly be worth giving serious consideration to choosing a much lower-interest credit card that does not offer rewards, and use the difference in saved interest payments to buy what it is you really need.

However, that reference to interest rates is also relevant to circumstances in which reward cards could more than usefully pay for themselves. If you are the kind of credit card user who always pays off the whole of the balance on the card before payment is due, and who therefore never pays any interest, the rewards for using the card are genuinely free.

If you are not sure whether you can maintain the discipline of paying off the whole of the balance on your credit card each month, then an alternative worth considering is the cash-back credit card. Similar in principle to the reward credit card, a cash-back card pays back in ready cash a certain percentage of whatever has been spent on the card each month. However, with the best cash-back rate currently running at around 5% on spending that attracts almost 19% APR in interest, it is clear that you will still be paying quite handsomely for the use of the card – that is, of course, unless you are in the habit of repaying outstanding balances, avoiding interest paying, and pocketing the very handy 5% cash-back.

Credit cards with rewards – and their family members, cash-back credit cards – can, therefore, be worth it, especially if you maintain a fairly strict regime of repaying any balance on the card before it starts to attract interest.