Credit cards can be a blessing or a curse when it comes to credit scores and debt. According to an article on, credit cards were first introduced in the late 1950s by Bank of America and are now held by more than 191 million Americans. In fact, the average number of credit cards per card holder is about 2.7 cards. They can come with an array of perks, points, and reward systems, but they’re not always worth it. Let’s review these conversation starters, for the next time you’re considering adding or switching out your primary credit card.

Do You Carry a Balance?

If you carry a balance, we advise avoiding reward-type credit cards. Rewards are dangled in the form of airline miles, points, or even cash back percentages, but they have a cost.The interest rate on these cards, which start at 24.99% and upward, is significantly higher as compared to non-reward cards, which are closer to 20.99%. Next up, let’s remember the annual fee you incur for the privilege of carrying the card in your wallet. Starting at “just” $99/year but increases as the rewards tiers and additional benefits are offered. Combine the cost of higher interest and the annual member fee, any “reward” benefit you earn is reduced or negated by these charges.

If you hold a rewards card for your small business, CPA Jamie Trull advises to routinely pay off your credit cards rather than holding a balance as the interest payments will compound and only hurt you in the long run.

If you routinely pay off your balance in full and on-time, essentially using credit card(s) as a convenience tool then rewards cards offer valuable “to you” perks suggesting a second look. We are not fans of constant point-chasing methods as it often leads to increased spending as you seek to rack up points.

Maximize Your Rewards

If your wallet, physical or digital, already holds reward cards with the potential to give you more rewards, you need to act to maximize your rewards. This is very important, especially for higher tier cards, if you carry multiple cards simultaneously.

If you do decide to pay the higher annual fee, currently $550/year for Chase Sapphire Reserve card or the $5,000/year for the by invitation only Black American Express Card, you must hone in on your most desired benefits. But keep in mind, you’ll have to deliberately act in order to reap all of the benefits offered. Many of the newest benefit offerings like luxury retailer credits, airline fee rebates, and bonus points are not an automatic enrollment. In other words, to take full advantage of your benefits, you’ll have to pay close attention and enroll when necessary.

Not only that, but your credit card benefits should fit your lifestyle and preferences. If you’re an avid overseas traveler, then flexible airline points might be a good fit for you over retail rewards. Living in an airline’s hub city (Atlanta, Chicago) likely means a single branded card is a better option. However, never be wooed by a credit card incentive that you’ll rarely, if ever, use.

At the end of the day, your credit card should work for you and not you for your credit card. Consider all the moving parts involved when you analyze your available rewards and determine the card that works best for you and your family.

At Organized Instincts, our team of daily money managers help you capture your beloved credit card rewards and maintain your stellar credit score. Schedule a conversation today and learn how you can utilize our knowledge to enjoy your rewards with the greatest outcome.