Walsh notes that rather than enact an outright
ban on credit card transactions involving gift card purchases, some stores are just adding a few simple security measures, such as checking IDs before processing these charges.
For example, in January, you think you're getting a 1.7 % rate
on your credit card transactions, but you processed several rewards cards.
For information about interest rates
on credit card transactions, please read our article on credit card APRs.
There can be advantages to using credit cards, such as travel and cash rewards, but those rewards only benefit you if you avoid paying interest
on your credit card transactions.
Most issuers make no more than 2 %
on every credit card transaction, which is why card rewards rates seldom approach this breakeven point.