Maximizing Credit Card Rewards

Posted on August 29, 2008
Filed Under Credit |

In their quest to get you to sign up for their credit card, banks and financial institutions are coming up with more and higher incentives to entice you. Frequent flyer miles gave way to gas miles which opened the door for cash rebates and reward points to be used at ‘our fine member merchants’. When most other things are equal (APR, annual fees, fees for transfers et al), the style of reward points and how you can make use of them can be the deciding factor in which card you choose to put in your wallet.

One of your best options for a credit card these days is one of the current crops that offer higher rewards/rebates for purchases made in gas stations, convenience stores and supermarkets. These so-called ‘everyday purchases’ are the market that credit card companies want to capture. That’s why the big push to highlight the convenience of using a credit card for things like grocery shopping - a great way to keep track of your purchases, they point out - gasoline purchases and other everyday incidentals. In order to get you to do that, they’re offering rewards and cash back on those purchases that are higher than those for other purchases.

Take a look at American Express’ credit card offering, Blue Cash. The card offers a 0% introductory APR for the first six months. After that, the APR is from 11.2% to 16.2% depending on your credit report. There is no annual fee, no fee for balance transfers, and the APR for balance transfers is 4.99% for the life of the balance. Already, it’s looking like a very nice deal.

Add in, however, the cash back rewards program, and you have a credit card that can actually SAVE you money. If you pay off your balance in full every month on time, there is NO INTEREST for 20 days on any of your purchases. The Rewards program offers you 1% back on all your ‘everyday purchases’ up to the first $6,500 you pay for with your card. In addition, you’ll get .5% on all other purchases that you charge on your card. If you charge more than $6,500 on your American Express Blue Cash card, your cash rebate goes up to 5% on everyday purchases and 1% on all others.

How does that stack up? If you’ve budgeted $125 per week for groceries, that’s $6,500 for the year. Pay for that on your Blue Cash card AND PAY THE BILL WITHIN THE GRACE PERIOD, and you’ll save $65 on groceries for the year. If you stick to that, and also pay for your gasoline with your Blue Cash card, you’ll get 5% back of those purchases - since your grocery purchases alone put you into the 5% bracket. If you gas up to the tune of $40 a week, that’s another $104 in savings over the year.

Granted, taking full advantage of that sort of Cash back rewards program requires discipline and forethought - but it’s not as hard as it sounds. It just means thinking of your credit card as just another bill that you pay in full each month. And that, after all, is the best and most common advice that financial experts give.

Joseph Kenny is the webmaster of the credit card comparison sites http://www.credit-cards-info.com/ and also http://www.creditcards121.com/

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Maximizing Credit Card Rewards

Posted on September 12, 2007
Filed Under Credit |

We spend money every single day on many different types of products and services and the banks’ newest offer is that of saving when spending if you use their services; that is if you pay for your expenditures with special credit cards. These credit cards are part of a wide offer and the best thing to do is read as many bank-offers as possible before choosing a particular card. Maximizing credit card rewards is not only for economists, it can simply be achieved by anybody who informs himself on credit cards, carefully chooses a suited card and manages it correctly.

When you think of maximizing you should think of getting the best out of something. Maximizing credit cards means receiving the best reward for your spent money. This usually means choosing more than one type of card and sometimes more than just one issuer. Some types of credit cards offer rewords and money-back on purchases only if you buy a certain type of product with them; for example gas cards will only offer a bonus program for gas purchases and no reward on supermarket purchases. In order to maximize your credit card rewards you will also need a card that offers rewards on supermarket or store purchases.

Another very important thing to do in order to bring rewards to a maximum is carefully read the fine print about the credit card before you sign any deal. Many credit cards offer a 0% intro APR for 6 months or a 0% interest rate for an entire year; still do not let yourself beguiled, keep reading and see what happens after that promotional period of time. You may also want to check the annual fee policy and only choose a credit card with no annual maintenance fee - there are many types available form all large issuers. Anther thing to look out for is the “limit condition” as there are cards that only actually offer rewards after you have passed over a certain minimum limit of expenditures and other cards that stop offering rewards once you surpass the limit. Thus, read carefully the flyer and only after that choose a card suited for your needs.

After you actually have the card and you start spending, make sure you spend wisely. If, for example, the card only offers rewards when shopping in a certain type of store, go there and buy what you need form that place. Pay attention to the policy on your gas card as there are gas credit cards that only offer rewards when paying for gas purchase at a gas station belonging to a particular chain. None the less, before making any spending decision you need to think if you have enough credit to pay for the card line at the end of the month. You may win some cash-back bonus or a plane ticket, but this will be of no use if you will be in dept and unable to pay your credit card bills.

Maximizing credit card rewards can be achieved by anyone who thinks twice before getting the card and spending the money. It may sound complicated and difficult at first, but once you learn the trick it will become a habit and you will see that you can spend money from a credit card and win some back at the same time. Be careful with what the card offers and what the conditions are for you to be given your reward; choose separate cards for separate kinds of expenditures; spend money in the places where the issuer recommends - if you can manage with all these you are on the right track to getting the most out of your credit card reward program.

This article has been provided courtesy of Creditor Web. Creditor Web offers great credit card articles available for reprint and other tools to help you search and compare credit card offers.

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