3 Warning Signs You Shouldn’t Use Rewards Credit Cards

by Alexa Mason · 11 comments

There are many rewards that come with using credit cards responsibly. With rewards cards, you can rack up points to earn free travel, gift cards, and even cash. On the surface, using credit cards to pay your bills looks like a great idea. Why not get paid to buy what you’re going to buy anyway?

The problem is that while taking advantage of credit card rewards is completely possible, it’s not the best choice for everyone.

If you’re thinking of using credit cards to take advantage of rewards programs, here are three warnings signs you shouldn’t.

1. You Don’t Pay Your Bill in Full

Responsible use of credit cards equates to paying your bill in full each month. If you want to use your credit card to earn points or air miles, but don’t pay your bill in full each month, you’ll be charged interest. Paying that interest will completely wipe out the value of any points you’ve accumulated.

This makes the whole cycle pointless. And, even worse: if you don’t pay off your bill monthly, you could rack up a huge amount of debt.

2. You Spend More with Credit Cards

If you’re anything like me, swiping a credit card feels much less painful than swiping a debit card. With a debit card, you know money is coming out of your bank account — therefore lowering your balance. Not a good feeling.

With a credit card, you don’t have to worry about any immediate repercussions. You spend a little extra, because you know (or think) that you’ll pay off the balance at the end of the month.

Even if you do pay off the balance at the end of the month, you’re still buying extra stuff that you wouldn’t have purchased under normal circumstances. The extra money you spent probably cancelled out any rewards you have to gain.

3. You Already Have Credit Card Debt

If you’ve already got a mountain of credit card debt, you definitely shouldn’t be trying to game the credit card companies.

Even if you’re on a committed debt payoff plan, you shouldn’t try this. Everyone experiences moments of weakness when attempting to pay back debt; the last thing you need is to go on an impulse spending spree.


Credit cards aren’t evil. If used responsibly and paid in full each month, they can be very valuable. I know several people who earn enough points to score an almost free vacation each year. While this sounds alluring, credit card reward programs simply aren’t meant for everyone.

If any of these three warning signs are present, you should stick to cash or debit cards for your purchases. Credit card rewards aren’t worth going into debt for.

Do you use credit cards rewards programs? Why or why not?

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{ read the comments below or add one }

  • Mai Le says:

    I so scare of using credit now and still can not get rid of it yet

  • Adam Kamerer says:

    My wife and I picked up a rewards credit card several months ago, since we were planning some big expenses like moving to a new city and getting married and wanted to recoup some of those costs. I have to admit we were a little wary of it — I’d never had a credit card before and was leery of them. My wife had abused credit cards when she was much younger, but the credit fallout that resulted cured her of those bad habits.

    Avoiding extra spending has been something we’ve had to be vigilant about, but we’ve done pretty well, and mostly just use the credit card to pay things we’d already be paying like our Internet bill. We pay it off every month, and don’t have any plans to get another card.

  • Property Marbella says:

    Credit is something that banks have created to earn big money from us. The majority of people are using the cards totally wrong and end up in debt to the banks who earn even more money from them. Very few are following these three advice above, but they are very good if you do not want to be in the banks’ claws.

  • Jim says:

    As a merchant I have had to increase my markup to cover the additional cost of rewards cards. Rewards cards cost me 3+% non rewards 1.5+%. The rewards are not coming out of Visa or MC pockets but out of the buyer’s own pocket in the form of higher prices. In the 70’s S&H green stamps and gold bond stamps were offered by some groceries and gas stations. Those merchants charged an average of 4% more for their products than merchants who did not offer trading stamps,(you redemed the stamps for products or services offered by the stamp co.). Today’s merchant does not have that choice, rewards cards are forced on the merchant costing all of their customers more unless like me they offer a cash/check discount.

  • dojo says:

    We don’t have such good offers in my country, so my main idea is to stay away from credit cards altogether. I use debit cards only and all my accounts are on zero overdraft.
    Sure, if it was to use such rewards credit cards, being VERY careful and paying everything on time is mandatory. Otherwise, instead of getting the needed points and benefits you’d just get into debt.

  • Phil says:

    #4 You’re broke.

  • Michelle says:

    These are all great tips. So many people don’t understand credit cards, and if you are not able to use them for your advantage, you should hide them! 🙂

  • John S @ Frugal Rules says:

    We use credit cards quite a bit to get rewards and have started churning a little bit this year. I know it’s not for everyone and it can be easy to overspend if you don’t watch it. I find the key is to only spend what you’d be spending anyway and you should generally be fine.

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