Hey everyone, I’m Josh thanks for coming back for another Monday Money! I’ve talked a bit about cash back credit cards in the personal finance blogosphere and it’s sparked quite the conversation. It seems like credit card rewards have been popular from the day they were created and, continue to gain in popularity every day! However, to get the most bang for your swipe, you’re going to have to use tact when you use your card.
How To Get The Most Out Of Your Rewards Credit Card
This is the most important tip…to get the most back from your lender, you need to choose the best rewards program for you. Sometimes this can require the use of multiple credit cards. For instance, in a post I recently wrote for Your Daily Finance, Tara from Streets Ahead Living said in a comment…
“Great post! I’ve started using certain cards for cash back purchases to get the most bang for my buck. Like for example, I have a PenFed card that always gives 5% back on gas (on every statement, no minimum to meet) so I always use that card for gas purchases. But then for groceries, I use a different cash back card so I always maximize my return.”
So, it’s clear that Tara enjoys cash back and as a result, rotates different credit cards for different purchases to earn the most cash. However, it’s important to do this properly as well. Having so many credit cards can cause confusion when it comes time to pay back everything and do it in time. It’s also easier to lose track and spend more than you can afford to pay back in a given month. Now, I do have to agree that using different credit cards for different purchases is the best way to earn more for your purchases, it is dangerous. Here’s how to be careful about it…
Choose The Credit Cards That Fit You – When shopping around for a few different rewards cards to build a strategy upon, don’t just go applying for the first 2 or 3 credit cards you see. It’s important to compare your options and make sure that using the card will be beneficial to you and the rewards won’t go untouched. For instance, if you don’t like to fly, you have to reason to apply for an airline miles credit card! When you compare, you should pay close attention to these key factors…
- Annual Fee – Some rewards credit cards have astronomical annual fees while others don’t have any annual fees. To get the most bang for your buck, choose a card or two that you pay very little if not nothing annually to have.
- Interest Rate – You’ll probably want to avoid these at all cost and, it’s definitely possible. But, you always want to know what you will pay if you’re not able to pay your balance off by the end of the month. If nothing else, knowing your interest rate will serve as an inspiration to pay your credit card off completely within the grace period.
- Rewards Program – What kind of rewards does the card offer? Are they rewards that you will use? If you live in Oregon and, don’t like to travel, what use do you have with the Disney rewards card by Chase? You’ll never go to Disney and, if you do, you’re not doing it annually! Choose a rewards program that you will use.
- Follow Tara’s Example – If one credit card has a promotion for more cash back on a certain purchase, it’s best to use that card when making those purchases. Make sure that you keep in touch with the promotional rewards. One of my favorites is the Discover It card because the 5% cash back categories rotate!
- Make Bi-Weekly Payments – Most rewards credit cards come with a grace period that’s about a month long. At least, if you find the good ones. If you pay your credit cards off on a bi-weekly basis, you are sure to pay the card off within the grace period. This way, you don’t pay a penny in interest.
- Use A Spreadsheet To Keep Close Tabs On Spending – Making a spreadsheet is a pretty simple process. All you need o do is list your accounts and your balances on each. Every day, update your balance before you go to sleep and make sure you’re not getting close to debt that you can’t afford to pay off!
- Enjoy Your Rewards – Make sure to take advantage of the rewards you earn. If they just sit as points on an account, they’re doing nothing for you. Your lender isn’t going to call you and say “Hey there, let me give you some free stuff!”. It’s up to you to reach out to your lender and take advantage of the rewards you’ve earned.
Thanks For Reading!
Thanks for reading, I hope you’ve enjoyed this week’s Monday Money! If you have any questions or comments, drop me a line below…I’d love to chat!