If you’re like most Americans with a credit card, you’ve got at least 3 in your wallet. How do you decide which one to pull out at the register? Maybe you pick the one with the best rewards programs. Aren’t those things great? They give you free stuff like airline miles, cash back, or points just for normal purchases you’d make anyway.

Nothing in Life is Free

I love free stuff; the idea of it anyway. After all, nothing in life is really free; credit card rewards included. The money always has to come from somewhere. In the case of your credit card points, it’s the people paying interest on their credit card balances who are ultimately picking up the tab.

Now, that doesn’t mean credit card rewards are bad. Let’s just acknowledge that there isn’t any free money. The only reason they can exist is because of how much profit the credit card company is making from interest charges.

And that, friends, is why the GOLD Credit Card doesn’t offer rewards. We would have to raise our interest rates significantly (think triple or more) to be able to pay for a rewards program. We’d rather you just keep the money in the first place.

But It is Free if You Always Pay Your Balance

Yes, if you pay your credit card balance in full and on time every month for as long as you have the credit card, the rewards are free for you. So why wouldn’t you take advantage by earning them? If the spending habits of others are paying for your rewards, so be it.

If, on the other hand, you’re among the majority of credit card users who carry a balance, you’re almost certainly paying more in interest than you’re getting back in rewards. 1-3% is a typical number for a cashback program, but the average interest rate is 17.27%. It’s obvious who’s coming out on top when interest is accruing on a credit card balance: It’s the credit card company. It has to be, or there wouldn’t be a rewards program in the first place. And that balance that most people are carrying? It’s over $6,000.

Should You Ditch the Rewards Card?

Not necessarily, but you do need to be realistic about your spending. If you have a revolving credit card balance (meaning you don’t pay off the balance in full each month), you’re not profiting from any rewards program, no matter how generous. Switch to a low-interest credit card and take a close look at your budget. An accurate budget is the tool you need you take control of your finances and get rid of that debt.

Don’t just leave your balance hanging out on that high-interest card. Transfer it to save on interest while you work to pay it off. Many credit cards offer an introductory 0% APR on balance transfers. Those can be a good option as long as you have it all paid off before the promotional period ends and depending on what the balance transfer fee is. You can transfer a balance to your GOLD Credit Card too. There’s no balance transfer fee here, and interest is charged at the exact same low rate as purchases.

If you pay off your credit card in full every month, I say keep the rewards card. You’re one of the rare few who is actually benefiting from it. That doesn’t mean it should be the only card in your wallet, though. Think strategically about what card you swipe and remember that the reason GOLD’s card has such a low rate is that our profit goes back to you, our Member-owners, not to lining the pockets of corporate stakeholders.

Don’t have a GOLD Credit Card yet? Get the full scoop on what makes it great then apply online.