Rewards cards are great, but only if you pay your balance in full each month. Otherwise, any rewards you earn will be eaten up by interest charges. If you know you’ll run a balance, you’re better off forgetting about rewards and using a low-interest credit card. Pros
- Let you earn hundreds or even thousands of dollars in free travel or cash
- Often offer a sign-up bonus
- May come with perks like rental car insurance
Cons
- May have an annual fee that’s more than the value of the rewards
- Tend to have higher interest rates than non-rewards cards
- Can require work to keep up with complicated earnings or redemption schemes
- May tempt you to spend more to earn rewards