Reward credit cards may not be the best for those with debt problems
Reward credit cards may not be the best for those with debt problems
- Thursday, 14 October 2010Reward credit cards may seem like a good option but they may not be beneficial to those with
debt problems.
That is because some providers charge £20 if the card is not used for a year and the interest on them can "wipe out any gains".
That is according to Raffick Marday from compareprepaid.com, a comparison site dedicated to prepaid and credit cards.
He said: "Unless you can pay for your reward credit card in full [each month] it is not worth getting one.
"So unless you can set up a direct debit to repay the credit card in full each month, so you will never have to pay interest, there is little point in using reward cards."
Therefore, if a consumer is living with
debt problems and is unable to pay off the full amount each month, a reward card could get them into
credit card debt too.
Earlier this month, the British Banking Association revealed that 173 million credit card purchases were conducted in August compared to 169 million in July.

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