Even though many people are up to their eyeballs with credit card debt, those who pay their bills fully can actually take advantage of rewards that credit cards offer rather than having credit card issuers take advantage of them. Today, I would like to point out how you maximize your rewards with cash back rewards credit cards. The majority of banks who offer credit cards have one that allows you to earn cash rebates. However, there are only a few cards that are worth considering.
Most cash back cards allow you to earn 1% rebates for every dollar that you spend on your card. While this is better than a plain vanilla Visa or MasterCard, the better cards offer more than 1% rebates on things like gasoline spending, spending at supermarkets, drugstores, dining restaurants and even travel. So what you should be doing is to avoid the typical 1% cash back cards and instead focus on researching cards that pay more than 1% rebates for certain expenses.
There are also things that you have to consider. For example, you want to find out if there is a limit to the amount of cash rebates you can earn. This is important if you charge a lot to your credit card. You want to know how you get your cash rebates. Some cards will automatically credit your statements periodically. Some will deposit the rebates in a bank account, send you a check or require you to request for a check.
Another thing to look out for is whether there is a tiered formula. For example, some cards require that you spend beyond a certain amount before you can start earning the best rates for cash rebates. This is important because the amount you charge to your card will determine how much rebates you can earn a year. A tiered formula serves to protect card companies from savvy consumers (ie folks who pay in full and just earn rebates from the card). If your spending level is not high enough, another card that pays a lower rebate could actually be the better deal for you.
To find the best cash rebate card, the first thing to do is to list down your expenses that is broken down into the following categories.
Some cash rebate cards pay extra rebates on things like utilities so you might want to include new categories if you come across cards that pay rebates on those items. After you have listed down your spending in these categories, you then have to manually calculate the amount of rebates you will earn from each card based on their cash back formula. For simple 1% cash back cards, the calculation is pretty straightforward. For cards that pay more than 1% on certain categories, you have to do some extra legwork with your calculators and find the card that will pay you the most rebates. To make life easy, we have actually created a cash back credit card calculator that will tell you the best card to get based on your expenditure patterns.
One more thing to take note of : do not fall for teasers when you are choosing a cash rebate card. For example, many cards that simply pay 1% rebates will tempt you by offering you the chance to earn for example 3% rebates on certain items but for only 6 months. The problem with falling for these teasers is that after 6 months, you are back to square one when you could be earning more rebates.
To sum up, if you the type of person that pays your bills in full or intend to, and you are looking to get something back from your credit card use, then consider using our calculator and get the best cash back credit card based on your spending patterns. You’ll be leaving money on the table if you do not. Getting little things done, like getting the best cd rates, cutting unnecessary expenses from your budget all add up in the long run.
This is a guest post by Mr Credit Card from AskMrCreditCard.com. Unlike Bank Vibe, which focuses on CD and savings rates, Mr Credit Card writes Credit Card Reviews. While readers here check out CD rates to maximize their interest they earn from banks, Mr Credit Card is going to write about maximizing earnings from credit cards.