Get The Most From Credit Card Rewards

Credit card rewards are often ways that you could get money back from your purchases. Spend $10 at Walmart, get $1 back. However, some credit cards offer different cash back bonuses, but not all of them are equal. Which cash back bonuses are the best? How should you be using the rewards? How can you best benefit from them?

Dos and don’ts

You definitely should not get a rewards card if you carry a balance. Carrying a balance is not usually good anyway, but doing that on a rewards card is practically like throwing money away. “In order to pay for those rewards, the financial institution charges a higher interest rate,” CBSMoneyWatch editor Jack Otter explained. “So, if you carry a balance, you’re paying more interest to pay for those rewards that someone else is getting.”

Annual fees are awful. Don’t pay them. According to Otter, there are a ton of good rewards cards that don’t come with annual fees. When doing the math, if you have a $100 fee, you have to spend practically $10,000 with that card to justify the fee. Of course, if you spend that much consider taking on a rewards card with an annual fee, but if not, steer clear of cards with fees.

Last, but certainly not least, always opt for cash back instead of travel miles or other rewards. A lot of cards offer a certain percentage of cash back and it is always the better option. Plus, travel miles are not as straight forward as cash back rewards. Cash back rewards are always a set percent back on certain purchases. Travel miles can’t always be used though. There are certain black out dates around the holidays (when most people would like to use the miles). However, if you would like to get travel rewards instead of cash, you should go for travel points instead of miles. While you won’t get as many points as miles, there are no black out periods for points and you can use them on more than one airline.

When choosing a credit card, these are all things to take into consideration. No matter what kind of card you choose, make sure it is one that you will benefit from. Also, be sure to read all the fine print about fees and other details regarding your card.

Amanda Blankenship

Amanda Blankenship is the Chief Editor for District Media.  With a BA in journalism from Wingate University, she frequently writes for a handful of websites and loves to share her own personal finance story with others. When she isn’t typing away at her desk, she enjoys spending time with her daughter, son, husband, and dog. During her free time, you’re likely to find her with her nose in a book, hiking, or playing RPG video games.