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Rewards credit cards can be 'inflation fighters' but only if used correctly, expert warns
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Credit card holders can take advantage of cards that offer rewards to earn cash, points or airline miles. But if those cards aren't used correctly, the rewards won't be worth it, one expert cautions.
Some cards will even pay you a few hundred dollars just to sign up, which can come in handy especially with credit card debt piling up in part from painfully high inflation. However, unpaid debt can cripple you with high interest charges if you don't pay off the balances on time.
According to a recent report from the Federal Reserve Bank of New York's Center for Microeconomic Data, credit card balances have already increased 26% since the first quarter and total credit card debt has already surpassed the $1 trillion mark.
WHY YOU SHOULD NOT PUT CHARGES ON YOUR CREDIT CARD AMID TODAY'S HIGH INFLATION
"The second quarter of 2022 showed robust increases in mortgage, auto loan, and credit card balances, driven in part by rising prices," Joelle Scally, administrator of the Center for Microeconomic Data at the New York Fed, said in a statement.
While credit card offers like sign on bonuses or cash back can seem appealing, certain rewards cards are "only helpful inflation-fighters for consumers who regularly pay off their balances in full every month," Credit Sesame financial analyst Richard Barrington told FOX Business.