Credit card rewards programs possess a charm altogether their own. The appeal of these programs comes from the fact that the bank pays you a percent of every dollar you spend when you swipe your card. All the same, not everything about cash back rewards programs comes up redolent like roses. Charge card companies are cunning. They are in the business to make money, not give money away. If you are not careful, you may find yourself paying for your rewards program, instead of reaping the benefits from it. Cagey consumers know how to make the most out of these programs, and so can you, if you use these five tips.
1. Choose the right card
Select a card that pays you cash back, not airline miles or rewards -cash is king. Do not be fooled by advertisements showing low yearly fees or introductory interest rates. Pick the card that offers the best cash back rewards programs, accompanied by the lowest fees. Verify this in the fine print.
2. Pay the card off each month -in full
If you are throwing money away on interest charges, you are not making the most of your rewards card. Pay the card off in full each month, every month.
3. Double up on your rewards
Make sure your cash back rewards card pays you for everything you do, not just certain purchases or transactions with specific merchants. Use your rewards card to buy your gas, groceries and even pay your household bills. Since you are paying the card off each month, you maintain your budget and earn the most rewards possible.
4. Stick with one card, until you cannot
Some reward cards programs have gotten wise to consumers doubling up to get rewards and using their card for day-to-day purchases. In light of this, these banks put a limitation in place regarding how much cash back you can earn over a calendar year. Max out each rewards card offering, and then, switch to a different cash back card to maximize your annual rewards. For instance, if your cash back Visa only pays rewards up to $500 a year, get to the $500 cash back as fast as you can and then switch to your cash back rewards MasterCard -or similar card. Keep as many cash back cards in your wallet, as you need in order to maximize your rewards each year. As long as you pay off the card you are using in full every month, you come out on top 365 days a year.
5. Save your cash back
If you are serious about maximizing your cash back, make wise choices when it comes time to reap your rewards. Save and invest your cash back. Think of your cash back as bonus money not spending money.
If you follow these five tips, you could earn as much as $2,000 a year in cash back rewards, or more, with interest. After all, isn’t it about time your bank started paying you?