Credit cards at one time – not so long ago – represented fairly simple and straightforward financial tools. One simply used one’s credit card to purchase goods, received a statement each month and either paid it off in full or made a partial repayment, knowing that one would thereafter be charged interest on the balance which remained outstanding. In modern times, however, credit cards come in a dizzying array of forms, quite understandably confusing a great many consumers and leading to their being a substantial issue surrounding many people using credit cards which are far from being the best ones suited to their personal financial circumstances and the way in which they tend to use their credit cards.
It stands to reason therefore that in order to maximize one’s rewards and make money from credit cards, the first step is ensuring that the credit card which one is using is the right one for one‘s spending habits. This is not always an easy fact to establish but begins with a detailed examination of particularly what one uses one’s credit card to purchase and whether one clears the balance in full each month on a regular basis.
Where a credit card balance is cleared in full each and every month and is used only for making traditional purchases as opposed to such as withdrawing cash from ATM’s, some form of cash back credit card is almost certainly going to be one’s best option. This is likely to mean that for every purchase one makes, one will accrue a percentage of that amount as a cash back on the credit card. These amounts are accrued to a certain point each year, at which time the lump total will be credited to the credit card. Where one is also careful to invest the money required to clear one’s credit card each month until it is needed to do so, interest can also be earned in this respect.
Whether one does or does not clear one’s balance in full each month, however, a cash back card will not necessarily be the best card available. Where one uses the credit card almost exclusively to make purchases from one particular retailer, any form of reward card issued by that retailer may prove more beneficial. This could conceivably include everything from airlines, where one travels regularly on business, to supermarkets. It may be that the airline issues a credit card where air miles are accrued, saving one more money than an equivalent cash back credit card would, or that the supermarket issues a credit card where grocery vouchers are earned in a similar fashion.
The only way to determine how to maximize one’s rewards on credit cards is to conduct a self-analysis on one’s credit card habits as detailed above and subsequently take the time to explore the options which are available in full.