I always see cards that get miles, money for disney, whatever…and wonder if they are worth it. Some people are all for rewards cards…others swear they are not worth it, rates are too high etc.
Which really is better, and under what circumstances/spending habits? I am the kind who only uses a card when I NEED to, and in fact will only be getting one because I need a new laptop. What do you think?
Thanks in advance.
I know that credit cards arent good, and as I said I only use them for emergencies. A lap top is a necessity for me, to both study and work, and I was expecting a few more months out of it to save up. As is, dying right before my sons birthday and christmas, to pay with cash I would either be broke for getting the one I need to do what I do, get another sub-par laptop and spend a good half of my day yelling at it and thus becoming less productive, or I need to get a card so I can make only small payments until I get through the holidays, after which I would pay as much extra as I had until I was done.
If you only use a card when you need to, don't worry about getting a rewards card. They work best when you make a point to charge everything you can as long as you pay it off in full every single month. If you rarely use it, then get a card with the lowest interest rate you can find and skip the rewards.
Rewards cards usually have a higher interest rate than cards that don't. You mention you will be getting a laptop and paying it off over time. There is no rewards card that will make it worth paying the higher interest.
As long as you aren't an impulse buyer, I would recommend you consider a rewards card because if you pay in full every month, you will benefit. For example, our Discover card is paying 5% cashback on gas and car repairs, and although we aren't spending any more than we would have by paying cash, we've accumulated about $100 in cash back. And by paying in full every month we are not paying any interest charges. The Chase Freedom card can pay up to 3% cash back on certain categories of purchases. The American Express Blue Cash card is a good choice for people who spend a lot on credit cards but for most people, the Chase Freedom, Citi Dividend Platinum Rewards, or Discover can be a better choice. You have to evaluate each program to see which is the best fit for your particular spending patterns.
By charging everything we can on rewards cards, then paying in full every month, we have accumulated over $1000 in cash back over the last three years – and that is free money. However, for people who know they are going to spend more than they should, they should stay away because the rewards, although nice to have, do not make up for paying interest or buying stuff you don't really need.