Charles H. Miller
Making cash back credit cards work for you isn’t necessarily that hard. It does, however, require that you select the card that works for you and rewards the purchases you are already making. Also, if you are going to carry a lot of balance from one month to the other, you won’t earn much at the end of the day. So read carefully to turn shopping with your cash back credit card into a profitable experience…
1. Do NOT go on a shopping spree
Just because you will get some percentage of the money spent back doesn’t mean you should go on a shopping spree. If you want to save, and even earn some cash with a new card, act like it’s your old card. No need to spend additional $100 per month to get 1 to 5 percent back.
2. Try paying as much balance as you can every month
And pay on time to avoid late fees and higher interest rates. By not making payments on time, a credit card issuer could forfeit your rewards. This is something American Express is known for, so you better not forget to make regular monthly payments and make sure to pay off as much balance as you can. Only by not getting extra debt will you benefit from cash back rewards.
3. Get the card that matches your lifestyle
For example, most New Yorkers don’t need a cash back on gasoline purchases. To get real benefits, go for the card that will reward purchases you are already making to turn them into a rewarding experience. Think about where most of your spending goes every month and get the card that will reward such purchases.
4. Pay attention to limits
Big percentage of cash back typically comes with a limit. There are cards offering up to 6% cash back but it is capped at $6,000 per year in purchases, after which the percentage drops to 1%. Knowing this could prompt you to get another card offering 2 or 3 percentage back to use after the annual (or quarterly) spending limit has been reached.
5. Shop around
Don’t put all eggs into one basket. Even if you love your current bank that doesn’t mean you should get their cash back credit card. With so many options out there, you should shop around to get the card that works best for you. Also, you don’t have to opt for a single card: you can — for instance — get one card for gas and one for groceries. This way, you can make more of your purchases a rewarding experience. That’s the way we roll.
Ready? Get, set, go!
Now that you have mastered the basics, you are ready to take the next step and get the card, or more of them, that offers cash back on your existing purchases. Comparison shop as much as you can, and start by checking out some cash back cards below. Good luck!
