RICHMOND, Va. (WWBT) - According to a new Bankrate.com report, 68% of people with credit cards are making a big mistake.
They’re trying to maximize credit card rewards. Millennials are the worst offenders: 78% with credit card debt are chasing rewards.
The problem is, the average credit card charges close to 18% in interest.
So, it doesn’t make sense to pay that much in interest only to gain 1, 2 or 3% in cash back or airline miles.
The only way cash back rewards and airline mile programs work is if you don’t carry a balance each month on those rewards. The moment you start to carry a balance you cancel out that reward.
You must be diligent in paying off your credit card each month so you are not charged any interest. Then chasing credit card rewards make sense.
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