How to take maximum returns from REWARD CREDIT CARDS

Want to save on travel, pick out free merchandise, or receive
checks in the mail? These are just some of the bonuses
companies offer through rewards credit cards. With a little
planning, you can make the most of your rewards credit cards.

How Rewards Credit Cards Work

Companies offer a vast array of reward plans. Yet the basic
principle of all rewards credit cards is the same: you receive
“rewards” for using the cards. For cash back cards, companies
offer a certain percentage, such as 1%, return on all of your
purchases. So if you spend $2,500 with your credit card, you
can expect a check for $25. Some companies include a higher
percentage, such as 5%, in cash back for shopping at grocery
stores and gas stations. This way you earn more cash for
regular household purchases. Think about it: the $2,500 you
spend could bring in a $125 check – just for shopping!

Cash back cards are not the only type of rewards credit cards
available; there are plenty of others to choose from. Some
rewards credit cards offer a point system. You might receive
one point for each dollar spent. You can then use your points
to buy certain items. Others include rebates for gas purchases,
discounts on hotels, and miles toward airline travel.

Do Your Homework

With so many options available for rewards credit cards,
selecting a card can be a daunting task. To make sure you are
taking full advantage of a rewards credit card, you first need
to do some homework. Start by looking over your recent
purchases. Do you always buy groceries at a certain store?
Consider a credit card that offers a high percentage of cash
back on grocery store purchases. Do you spend a lot on travel?
If so, look into rewards credit cards that offer points toward
free air travel. Do you have a long work commute? Rewards on a
gas card will help you save on car travel. If straight-up cash
is what you are after, a cash back rewards card can give you
just that.

Besides considering your spending habits, think about your
reward preferences. Perhaps you do not usually travel, but
dream of taking a vacation to Hawaii. Sign up for a rewards
credit card with travel benefits. You can take that fantasy
vacation as a result of the reward plan. The bottom line: study
your purchasing habits and lifestyle to find out which rewards
credit card is right for you.

Make it Advantageous

While rewards credit cards offer great benefits, there are also
potential drawbacks to consider. Some rewards credit cards
include an annual fee or high interest rate. If you carry a
large balance on your card, you may end up spending more on
interest than you receive in benefits. However, if you use your
credit card to make ordinary purchases, pay off the balance each
month, or carry a low balance, then the rewards credit card can
be very beneficial.

Enjoy the Rewards