We all know that, used properly and responsibly, a credit card can be a great thing. After all, many credit cards have rewards programs that can benefit you when you buy things that you would normally buy. If you choose to get credit cards, you should choose those that offer something in return – whether it is cash back, airline miles or free merchandise. Find a rewards credit card (or two) that fits your needs, but don´t pay interest on a credit card that gives you absolutely nothing in return.
Looking at credit cards rewards programs
The key when looking for a good rewards credit card is finding one that fits your particular needs. Each person has specific things he or she is looking for. And, like any aspect of your personal finances and financial planning, you need to tailor your credit card to you. If you have reasonably good credit, you will be able to pick and choose the credit cards that best work for you. If you travel a lot, obviously you want an airline miles card. If you like to have a little extra cash at the end of the year, a cash back card is for you. (But watch out! The percentage of cash you get back is decreasing, and carrying a balance can destroy the advantage you would have got.)
I have a three year old whose grandparents live on opposite ends of the country. Obviously, we travel a good amount, and we are looking forward – with dread – to college expenses. My credit card rewards programs include the Upromise card from Citi and the No Hassle Miles card from Capital One. Friends of mine have a Disney rewards card, and reward themselves with a fabulous vacation every couple of years, and I have another set that manages to pay for all of their Christmas toys for their kids with their rewards card program from Toys R Us.
Using your rewards credit card
The key to getting the advantage of credit card reward programs is wise use of your credit cards. Try to pay off the balance each month, leaving plenty of room to rack up the rewards, and avoid steep interest charges. Do not put more on your credit card than you can afford to pay off each month (or, at most, in two or three months). I set aside my Upromise card for online purchases. Whenever I buy something online, I go through the Upromise Web site for my shopping and use the credit card. Double savings for college! Then the savings can be invested in a 529 college savings plan. I use the Miles card whenever I go grocery shopping. These are all things I would buy anyway, so nearly everything I use my credit cards for is already built into the monthly budget. And it is paid off just about every month.
This works whether you are vying for cash back, free gas, merchandise or a vacation. When you choose the right credit card rewards programs for you, you can take advantage of great opportunities to get a little something back. Set your financial goals, and then find a credit card or two that will help you reach them.