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Credit Cards

Credit Cards Offering Better Rewards

But look beyond juiced-up bonuses.

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Credit card issuers are pitching potential customers with increasingly desirable rewards. In the final quarter of 2014, cash-back amounts and miles (or points) offered as initial bonuses on rewards cards rose 14% and 10%, respectively, over the same period a year earlier, says credit card research site CardHub.com.

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As you sift through options, look at the broad picture rather than focusing on a juicy bonus, says Curtis Arnold, founder of card review site CardRatings.com. Pay close attention to the details on how to earn and redeem rewards. Some cards require you to spend a certain amount before rewards kick in, or they limit how much you can capture in rewards during a specified period. Travel rewards cards may restrict when you can use your miles, and miles may expire if you don’t maintain a minimum amount of account activity.

Review your budget to determine what type of card fits your spending patterns, and do the math to see whether benefits outweigh any annual fee. If groceries and gas are a big slice of the pie, a card such as the American Express Blue Cash Preferred ($75 annual fee)—which pays 6% on up to $6,000 in supermarket purchases annually, 3% on gas and retail purchases, and 1% on everything else—may be a winner. The Citi Double Cash card pays 1% when you make any purchase and another 1% when you pay the bill.