Some people use credit cards for building credit. Some have one for emergencies only. But the smartest credit card users actually earn money by using them. So how do they do this? With cash back rewards cards.
Best Cash Back Credit Cards
The first step is to do some research to find the best cash back credit cards available today. Don’t sign up for the first one. Compare different offers and decide based on which rewards you can take advantage of the most based on your own spending habits. Look for cards that have no annual fee, best rewards rates, and don’t be fooled by initial offers that change after a certain amount of time (unless that’s all your after).
Don’t compete with interest
The one simple rule for successfully taking advantage of rewards cards is: pay off your balance each month. If you can’t do this, you’ll end up losing money. 1% cash back cannot compete with 19% interest. Never spend more than you can pay off, and you’ll be safe. Pay your monthly balance in full and you’ll pay no interest and earn the maximum rewards.
Use it. A LOT.
Use it for everything. The fine print may not give rewards for certain purchases, but use it anyways. Even if only to get used to using it for everything. Stop carrying as much cash and use your credit card. Use your card to pay bills. Have a large tax bill? Pay it with your credit card and get cash back. In fact, if you use it for everything, it can even end up being a great way to centralize your spending and budgeting.
Warning: It’s easy to go overboard
Know yourself. If you don’t think you can keep a budget with a credit card, don’t try to do this. If you start spending more than you can pay off, you’ll get into trouble…fast. Remember, you can’t compete with interest, but worse than that: credit card debt can be a tough thing to recover from.