Recently, credit card companies appear to be offering sweeter terms for their rewards credit cards. If you’re someone who pays off their monthly card bills in full, then applying for this type of card makes total sense. You’re virtually earning either money (cash back) or items (from rewards points) for the spending you do on your card. It only becomes a problem if you end up accumulating debt, since even with rewards, you won’t be coming out ahead if you carry a credit card balance and pay interest.
Sometime ago, I published a post that discussed how to combine credit cards to earn up to 4% in rewards. While many card companies claim that you can earn 5% or more in rewards in select categories, the fine print actually specifies that what you earn is subject to certain limitations. For example, the 5% in rewards may be the maximum you’re able to receive and this may only apply to choice spending categories. This means that your average rewards percentage is lower than you may think. The trick here is to find the best way to combine the use of your cards so as to raise your average rewards percentage.
Check out this infographic that was created by CreditLoan exclusively for our use.
Here are some things you can do to get the most out of your rewards cards:
- Capitalize on cards with “teaser” categories. Pay attention to your rewards calendar or schedule (which is available from your credit card issuer) so you can use cards which pay back the most (in rewards) during a particular time period.
- Use a Discover credit card or an AmEx credit card in conjunction with other cards as they typically pay higher than average rewards. While they are not as widely accepted, you can still use them in places you know that accept these cards. And when you do, it’s typically a better deal for you.
Here’s an example of how you can score an average of 4% of your spending in rewards from top credit card deals:
Disclaimer: Note that credit card rewards percentages and terms change all the time, and card issuers may change the card products that are available to customers. So what we present here are just examples and a guideline for how to use your rewards credit cards the right way. With some proper planning, you can get a lot more back than you think!
Image Source: The infographic was created by CreditLoan.
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