How to Get Rewarded When You Use Your Credit Card

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Credit cards that offer rewards can be a good deal if you use them wisely. You may be able to earn enough airline miles to take a long-desired trip or earn a discount on all purchases made through a certain retailer. You may get cash back on everything you buy with a rewards credit card, or earn points that can be turned in for restaurant gift certificates, car rentals, hotel stays and more.

Deciding on a rewards credit card can be tough because there are a lot of appealing offers out there. The best bet is to get one that will provide the maximum benefits for your particular situation. If you have a large family, for example, you may want to use a rewards credit card that gives you a certain percentage back on your grocery purchases. If you get all your prescriptions through a certain drugstore, or frequently buy books through an online store, a rewards card may give you the opportunity to earn double or triple points on your purchases made at those merchants. Have travel plans? Look for the rewards credit cards that offer points good towards airline miles, hotel stays or car rentals. (After you review all the offers, you may even decide to get two cards and use them for specific purchases.)

All of the major card issuers --Capital One, Citi, Visa, Mastercard, Discover and American Express -- offer several versions of rewards credit cards. Capital One, for example, currently has four offers on the site, two that offer airline miles, one that's affiliated with the travel site and another that's an MTV-branded card. The MTV card offers exclusive rewards to its cardholders, including MTV merchandise and tickets to MTV events and show tapings.

Some cards offer bonus points if you spend a certain amount of money within a set period. With the Chase Sapphire Preferred Card, you earn 50,000 bonus points (worth $625) after you spend $3,000 in the first three months. Other cards offer tiered rewards for different purchases. The Sony Card from Capital One provides 5 points per $1 spent on Sony purchases, 3 points per $1 spent on dining out and movie purchases and 1 point per $1 spent on all other purchases.

Keep these tips in mind when you're considering which rewards credit cards you'd like to apply for:

  • You maximize the benefits that you receive with a rewards credit card when you pay off your card balance each month. You don't pay interest, and whatever points or rewards you get are like extra money.
  • If you do carry a credit card balance each month, a rewards card might not be a good choice for you, since they often have a higher annual percentage rate (APR) than some cards that don't have rewards.
  • You'll need good to excellent credit to qualify for most rewards cards.
  • Read the fine print on the cards carefully so that you understand their limitations. Don't just assume, for example, that you'll be able to stockpile your airline mileage points for five years so you can use them for a trip to Europe. They may expire after a certain period.
  • Be aware that some cards may limit the number of points that you can earn each month and/or annually. If you're likely to exceed that limit, you may want to check out other card options without such limitations.
  • Check for annual fees (which offset, to some extent, the rewards you're getting), and for the APRs on cards you're considering. Some cards may offer a special introductory low interest rate or allow for balance transfers from another card.

Having a good rewards credit card is like being paid extra for spending money. But don't go overboard on that spending just because you're getting something back. Use these cards wisely and the one of the rewards you'll get is enjoying your bonus with a clear conscience.

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Please note your financial situation is unique and our tips & advice presented here may not be appropriate for your situation. recommends that you seek different advice & opinions from your own accountant or financial adviser who understands your individual circumstances before making any important decisions or implementing any financial strategy.