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Congratulations! Paying your credit card balance on time every month most likely means:
- You are not paying interest
- Possibly earning rewards
However, if you aren’t earning reward points on purchases, you may be losing out on free money.
Let’s say, Cindy and Spencer each charge and pay on time $1,000 a month for a year. The only difference is Cindy has a non-rewards card and Spencer has a 3% cash back rewards card.
| Non-Rewards Card | Rewards Card | |
| Cash Back Earned | $0 | $360 |
The table above displays the amount of cash back that would be earned by paying your credit card bill in off in full and on time for one year.
At the end of the year, Spencer has earned $360 in cash back, while Cindy didn’t earn any rewards.
Two of the most important considerations when choosing a credit card are the interest rates and fees — the lower the rate and fees, the lower the cost of borrowing.
If you are paying your full credit card balance on time every month and not earning rewards, it may be time to look at what reward options are available to you.
However, if you are carrying credit card debt month-to-month then reward points are not a reward since the interest you are paying most likely outweighs the reward points earned.
