Rewards credit cards can be helpful if borrowers are careful

Accounts that grant consumers benefits for taking on credit card debt are growing more popular with borrowers in nearly all income groups.

While many experts have noted that rewards credit cards are largely for more affluent consumers, a large number of those in lower income ranges are now using these accounts regularly as well, according to a report from Phoenix Marketing International. In all, 74 percent of people with incomes between $20,000 and $29,900 last year had rewards cards, and used them to spend for 72 percent of their credit card purchase value.

Further, only 26 percent of those in this demographic paid an annual fee on their rewards card, the report said. However, that number was higher than the 23 percent of people in all demographics who paid such a fee for a non-rewards account.

Because of fees and higher interest rates, rewards credit card accounts can end up costing borrowers more than those without benefits, and may lead borrowers to end up needing to seek debt relief. As such, these cards should be handled cautiously.