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Last month I signed up for a credit card to get some cash back. To be honest, I've been debating this for a bit.
On one hand, I've noticed an uptick on credit cards offering bonuses for signing-up, up to $500. Extra money is nice, but you don;t get something for nothing.
I worry about how chasing the rewards may change our spending.
Our monthly expenses has been fairly consistent, so I believe using the credit card won't increase our spending while we grab some cash back rewards.
I hope I'm correct, but I'll be tracking the numbers just in case.
If you already have a reward or cash back credit card and you're looking to maximize your rewards, here are some tips:
- Pay with reward cards as frequently as possible. I'm not suggesting using your credit cards to buy needless items to up your rewards, but if you're going to already be spending the money (like monthly bills) and you can get a reward at the same time, then go for it. Worried about paying your credit card each month? You can set up an automated payment through your bank or credit union's bill pay system.
- Optimize your spending with the right credit cards. If you have multiple reward cards, try to increase your rewards by using the right cards for specific purchases. One of your cards may offer 5% cash back on gas purchases while another may offer 2%.
- Don't carry a balance. As a reminder if you carry a balance on your card, any rewards earned with your card(s) will be negated by the interest charges (unless you're using the 0% special).
I'd even suggest reviewing your usual spending habits for the past year and see if your current reward cards are being optimized. With free tools like Mint it can take 10-15 to pull the data and you can quickly see where you can adjust your spending.
Reward Debit Cards
For some readers though reward credit cards are too much hassle and not enough bang for their buck. They prefer to use debit cards to keep from getting charged by the credit card company.
While most debit cards don't offer rewards, there are a few options out there that may be of interest like PerkStreet FinancialSM Debit MasterCard® which has a cash back rewards program.
Thoughts on Reward Credit Cards
I'd like to hear from you about credit cards. How many of you have reward credit cards? How many of you use it regularly to maximize its bonuses?