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Why Interest Rates Matter More Than Credit Card Rewards

Financial people, owe asian woman, girl sitting on floor at home, hand holding credit card and bills, stressed by calculate expense, no money to pay, mortgage or loan. Debt, bankruptcy or bankrupt.

It’s easy to get drawn in by the perks like cash back, points, airline miles. Credit card rewards can be exciting and even valuable. But here’s the truth: if your interest rate is high and you carry a balance, those “free” rewards may cost you far more than they’re worth.

The Hidden Cost of Rewards

Many rewards cards come with higher interest rates than non-rewards options. If you pay your balance in full every month, you’ll enjoy the perks without paying extra in interest. But if you carry a balance, even for a short time, the interest charges can quickly outweigh any benefits you’ve earned.

Example:
  • $1,000 balance at 18% APR could cost about $15 in interest in just one month.
  • If that month you earned $10 in rewards, you’re still $5 in the red.

Why Watching Rates Matters
Credit card rates can change, especially with variable-rate cards tied to the prime rate. When rates go up, so does the cost of carrying a balance. That’s why it’s important to check your statement, know your APR, and understand how changes affect your bottom line.

Smart Ways to Maximize Value
  • Pay in full each month to avoid interest entirely so rewards truly pay off.
  • If you carry a balance, focus on cards or loans with the lowest possible rate, even if rewards are smaller.
  • Review your rates annually – better offers or refinancing options could save you money.

Maple FCU Can Help
We believe financial wins shouldn’t come with hidden trade-offs. Our credit cards and loan options are built to give members fair rates, and our team can help you find the right fit for your needs. Rewards are great, but smart rates are even better.
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