9 Keys To Finding the Best Rewards Cards
When searching for the best rewards credit cards you should be aware to follow the follwing steps. They will save you money in the long run.
See how much you spend. Review your credit card statements for the past few months to see what you’re spending in categories such as entertainment, travel, groceries, etc. If you use personal-finance software such as Microsoft Money or Quicken, you can quickly summarize your spending using the “report” features.
Review your current cards. A visit to the issuer’s Web site or a phone call to customer service can help you find out what rewards programs are available and if they’re running any promotions. You can ask if there’s a better program based on your spending; you may be able to switch over the phone.
Review your bills. A biller that didn’t offer the option of using plastic a few months ago may offer it now. Even some landlords are getting into the act. Charging recurring bills — utilities, phone, insurance, whatever — to your cards can help you build rewards without added cost, as long as you can pay the bill in full each month and don’t max out your limits.
Check out competing offers. 0 APR Credit Cards offers a wonderful comparison that can help you find rewards card(s) based on their ratings. Other places to check include Bankrate.com and FatWallet.com.
You can do better than 1%. Getting a penny back on every purchase used to be a decent deal, but now more-generous rebate programs mean you should be averaging at least 1.5% back on your spending.
Beware of annual fees. The best cash-back programs don’t charge annual fees. A fee of $20 or $30 isn’t exorbitant if you’re getting hundreds of dollars in rewards each year, but you should be wary of paying much more, especially if you haven’t been getting significant benefits from the program.
Limit your choices. You may be able to squeeze out more rewards by adding more cards, but you’re adding complexity to your life. Every card comes with its own due dates, terms, rates and program details, all of which can change. Consumers who don’t want to invest a ton of time in tracking their accounts should limit themselves to one or two cards, “certainly not over three,”. Also, consider setting up some kind of automatic payment plan to make sure at least the minimum gets paid on every card you possess. You don’t want to overlook one and get slammed with late fees and damage your credit scores.
Beware of transaction fees. Government agencies increasingly allow consumers to charge taxes and other fees. Unfortunately, many of these agencies contract with credit card processors that charge fees of about 3% to process the transactions. Those fees offset and usually wipe out any rewards benefits from using cards.
Lobby your billers. If you have to pay a big bill, or even a not-so-big one, by check or electronic transfer, request that the biller add a credit card option. Not all will comply, but you may help persuade a business or utility that’s been on the fence.