6 Signs You Don't Need a Rewards Credit Card

Rewards credit cards hard to resist. Credit card issuers are constantly improving their rewards programs, offering bigger signup bonuses and more opportunities to earn. Even if you're not on the market for a new credit card, you may change your mind after seeing what many of the latest credit cards have to offer. As tempting as it might be to sign up for a new rewards card, they're not for everyone.

You don't pay your balance in full each month. The only way to truly get value from a rewards credit card is to avoid any additional costs. That includes monthly finance charges you would pay when you carry a balance from month to month. Any Paying your balance off each month is to get maximum value from the rewards you earn. Otherwise, carrying a balance means you'll pay monthly interest and negate the rewards you've earned.

You have other high interest rate consumer debt. Rather than trying to maximize credit card rewards, you'll come out better by focusing on paying off your other debt. Cutting out any interest you're paying on other credit cards, personal loans, or auto loan will benefit you more in the long than earning credit card rewards. If you need to pay off debt from another credit card, a balance transfer credit card would be a better short-term option.

You can't control your spending habits. Rewards credit cards are designed to encourage cardholders to spend more money. The more you spend, the more you earn. The excitement of earning rewards can cause you to get into more credit card debt than you can afford to pay off. If you tend to have impulsive or emotional spending habits, having a rewards credit card can lead to financial problems.

You're not disciplined or your income isn't consistent enough to keep up with your monthly due dates. Late payments lead to a slew of penalties and wipe out the benefit of the rewards you've earned. Falling too far behind on your payments can even forfeit the rewards you've already earned. Catching up doesn't guarantee you'll get your rewards back.

You're not a heavy credit card user. After you've earned any initial signup bonus, it can take awhile to build up a sizable amount of rewards if you're not a big spender. While many rewards program offer non-expiring rewards, it can take months or even years to build up enough rewards to earn a flight or free night at a hotel. For light spenders, a rewards credit card may not be the most attractive option. A credit card with a low or promotional interest rate may be a better choice for light spenders.

Even if you decide a rewards credit card isn't the best fit, another type of credit card may be a better option for you. A balance transfer or even a no-frills credit card can be better options depending on your finances. You can always revisit the credit card selection in the future and choose one with rewards if it fits your needs.