Credit Card Clash: Are Low Rates or High Rewards Better for Your Wallet?
02/13/2024
Choosing between a credit card with a low Annual Percentage Rate (APR) and a credit card with great rewards is a common dilemma. The right choice for you will probably depend on your spending and debt management habits. Let’s discuss the pros and cons of each.
Low-, Fixed-Rate Credit Card
A low-, fixed-rate credit card is as straightforward as it sounds. Typically, it doesn’t come with flashy rewards, but the trade-off is that your monthly interest rate is lower and won’t change month to month.
A low-rate credit card is a great option for anyone to have in their wallet, but especially someone who will likely carry a balance. If you don’t pay off your entire balance each month, you won’t pay as much in interest charges with a low-rate card – which equates to more savings over time.
Rewards Credit Card
Rewards programs that offer cash back, airline miles, and more can be enticing. If you’re already spending the money, why not earn rewards?
Rewards credit cards typically have a higher APR. So, if you’re not someone who is diligent about paying off your card every month, you’ll pay a lot more in interest. Interest compounds monthly, so it can add up quickly.
Be sure to check for an annual fee. Some cards with highly desirable rewards also have expensive annual fees.
Ask Yourself These Questions
- Do I usually carry a balance?
- What are my goals, and how will the card help or hinder those goals?
- Do the rewards offered suit my lifestyle?
- What’s my average monthly spending?
- What’s the rate difference between the two cards I’m interested in?
- What are the fees?
Which Electro Savings Credit Card Is Right for You?
Because we’re a credit union, we offer some of the most competitive rates on the market. We know your situation is unique, so we offer options – all of which have zero liability for unauthorized purchases, a 25-day, interest-free grace period on purchases, mobile card controls, and much more!