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Maximizing Credit Card Rewards
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/
MORE RESOURCES:
Credit - Google News
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