UK Reward Cards Should Be Used with Caution

According to a recent statement made by Mr. Marday of online credit card portal, Compare Prepaid, suggests that reward credit cards are not the best option for debt consolidation.

Of course, reward accounts prove to be very useful for certain types of UK borrowers. Particularly, people who clear their balance monthly, are guaranteed to benefit from reward cards such as Tesco Clubcard or Nectar.

However, those who transfer balance from other cards will see no good in using reward accounts. Mr. Marday explains it with the fact that even though balance transfer rates offered by most reward cards are attractive, the rewards itself will be wiped out should the card holder fail to clear the balance.

The statement made by Mr. Marday shortly followed the report by the British Bankers Association published on October 6th. The Credit Card Statistics report suggests that the number of cards issued in UK in August 2010 fell to 61 million, from 64 million as the same period last year.