According to, 92 percent of all purchases made with credit cards are made with rewards cards, up from 67 percent a decade ago. Interestingly, a recent U.S. Consumer Payment Study said that 68 percent of card holders named rewards as the most attractive feature of their preferred credit card in 2017, up from 59 percent in 2016 and 55 percent in 2015.

The study also reported that people with higher incomes generally put greater emphasis on rewards. Only 55 percent of people with incomes under $25,000 named rewards as their top consideration, compared to 62 percent for people with incomes of $25,000 to $50,000, 71 percent for people with incomes of $50,000 to $75,000, 80 percent for people with incomes of $75,000 to $100,000 and 80 percent for people with incomes of $100,000 to $150,000.

As you might expect, because many consumers say that airline and hotel rewards are very confusing, cash rewards are the most popular type of rewards.

However, it should be clear to all of us by now, because there has been so much written on the subject, that if you don’t pay off your credit card balance in full each month, the rewards are generally not worth it. For example, on a cash-back card, you can earn between 1-5 percent cash back on each purchase made. It would save you money to pay for your purchases in cash, rather than to sign up for the credit card simply for the cash-back deal, if you are carrying a balance on the card of more than the amount of the purchases, and you are paying a 15 to 20 percent interest rate, or any rate above 5 percent.

Beyond that, however, although everyone I know with a rewards card swears that they pay off their balance in full every month, and they would never charge anything on their rewards card that they would not otherwise do or purchase just to get rewards, I really have to wonder. I always say that, if you buy something for $25, like a second round of drinks that you might not otherwise have, because you are thinking "I am getting 5 percent cash back," you are paying $25 to get $1.25 back. My math says that works out to a net loss of $23.75 to your bottom line. For me, the lesson is to be analytical about how you use your rewards cards if you have them. Actually, that is true for any credit card.

Another interesting aspect of the increasing popularity of rewards cards is their impact on some consumer prices and small business. Again according to, more and more retailers want the options of choosing which cards they will accept and what minimum purchase amounts they will require with credit card purchases. As you might expect, rewards cards have the highest “swipe fees” that retailers have to pay — up to 3 percent. By the way, under New York law, retailers can require up to a $10 minimum for credit card purchases. Retail organizations say that these higher swipe fees for thehighest fee rewards cards result in increased prices, especially in the case of small businesses that cannot absorb the fees as easily. It makes me wonder if the increased prices cancel out some or all of many of those cash-back rewards.

On a different subject, one that we have been following, the Federal Reserve in September raised its short-term interest rate for the third time in 2018, and for the eighth time since 2015. It also appears, to most experts, that it will raise the rate again three or four times in 2019. According to USA Today, this will once again raise the rates on variable interest rate loans for consumers, such as credit cards and home equity loan lines of credit, but it also appears that it is finally now resulting in an increase in rates for savings accounts and Certificates of Deposits, which rewards savers.

These interest rate increases are based upon the good economy that we hear about almost every day, with its strong growth, record low unemployment, wage increases finally for some (but not all) workers, and a good stock market. On the other hand, when I talk with those in the financial industry, they also talk about lower growth in the future, the risks associated with investing in stocks when, as interest rates increase, there are decent returns in some fixed income investments, and, yes, a possible recession a year or maybe two years out. It makes me think that now may be a good time for people to sit down with their investment advisor to take a hard look at the future, and maybe rebalance.

On a final subject, free credit freezes and fraud alerts are here, thanks to Congress, as of Sept. 21. You can get all the details at the Federal Trade Commission website,, but here are the basics. A credit freeze restricts access to your credit file (report), making it harder for identity thieves to open new accounts in your name. You can put on a freeze with all three reporting agencies, Equifax, Experian and Transunion, and unfreeze them, when you need to for your purposes, all for free. You can also get a free one-year fraud alert, which alerts businesses checking your credit to check with you first before opening a new account. You may need a separate PIN number for each reporting agency, but this is something worth considering.

John Ninfo is a retired bankruptcy judge and the founder of the National CARE Financial Literacy Program. Find his previous weekly columns at or at