Personal Finance

Finally Get Rewarded For Spending! Choosing The Right Rewards Credit Card

Almost every bank offers rewards credit cards where your purchases add up points to use towards merchants or travel, and sometimes even plain old cash back. This is FREE MONEY … you should be feeling like a terrible person if you don’t have one of these in your wallet right now. The catch is that they usually carry a much higher interest rate than other cards, so as long as you’re paying off the balance every month, these are great. Otherwise, the interest fees will likely offset the rewards.

Heres an example of perks offered by the highly regarded cash back Freedom Card from Chase Bank:

  • 5% cash back on up to $1,500 spent on rotating, quarterly categories. Unlimited 1% cash back on all other purchases.
  • No Annual Fee
  • $200 cash back application bonus after you make $500 in purchases in your first 3 months.

For those who travel frequently, the Blue Sky card from Amex offers:

  • Earn 1 point per dollar spent, plus 7,500 points can be redeemed for $100 in travel credit
  • No Annual Fee
  • $100 sign up bonus

Things to Note:

  • It’s important to choose a card that best fits with your spending habits and lifestyle
  • I personally only have TWO credit cards. The initial bonus may tempt you to apply for more, but having many open cards can actually negatively impact your credit score, plus you’re spreading out your purchases and earning less reward points on each card.
  • Don’t be turned off by an small annual fee – if you spend a lot of money on your card, the money saved in rewards is likely worth it
  • Make sure the points don’t expire. Bank of America stole a crapload of points from me with an expiration date that I was unaware of. I still feel bad for the poor guy who had to deliver that news to me. He may have needed a good cry or some serious counseling after he got off the phone with me.

Some great resources for finding the best cards available:

* Top Ten Reviews reviews lists their top ten rewards cards here 

* Nerdwallet breaks down the best card based on your spending type here 

Finally get rewarded for all of that hard work you put into spending! Just don’t use this as an excuse to spend more money. Having enough points for that flight to miami will do you no good if you can’t afford to go out and act recklessly with some mysterious latin guy while you’re there.

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  1. Pingback: That’s Yummy: Saving Money at Restaurants | The Frugal Model

  2. Pingback: My Search For The Best Travel Rewards Credit Card - The Frugal ModelThe Frugal Model

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