Advertisement
credit & debt

Plot Your Strategy to Pick the Best Rewards Card

Tips for how to decipher which card best fits your needs.

Using rewards cards can be as simple or complex as you want it to be, so you'll have to decide how deep you want to dive into the game. At one end of the rewards spectrum are cash-back cards that yield straightforward rewards with steady and predictable values. At the other end are travel cards "that can be a little more complex, but you can get more bang for your buck if you're willing to do the research to get a great redemption," says Thomas Donaldson, senior credit specialist for credit card research site CompareCards.

With a card that pays out airline miles, for example, you may squeeze out extra value by combing through flight schedules to find the best redemption rates. If your plans are flexible, you can compare the value of miles needed for flights to multiple destinations and search for flights on off-peak dates.

Advertisement - Article continues below

Also take stock of where you spend the most money. If you buy a lot of groceries and gas, for instance, look for a card that offers at least 2% or 3% back in both of those categories. (Or perhaps you could pick two cards–one that offers at least 5% back on gas and another with big rewards on groceries.)

If you tend to carry a balance from month to month, the interest you pay is likely to cancel out the rewards you earn. A CompareCards survey found that 39% of rewards credit card holders carry a balance, with an average total balance of more than $2,500. That's especially problematic given that rewards cards tend to charge higher interest rates than cards that don't offer rewards. Plus, most credit cards have variable rates. As the Federal Reserve continues to lift short-term interest rates, the interest on any balance you're carrying will rise, too.

Advertisement
Advertisement

Most Popular

18 Things You Can't Return to Amazon
Smart Buying

18 Things You Can't Return to Amazon

Before tossing these items into your virtual shopping cart, be sure to read Amazon's return policy first.
September 17, 2020
Election 2020: Joe Biden's Tax Plans
taxes

Election 2020: Joe Biden's Tax Plans

With the economy in trouble, tax policy takes on added importance in the 2020 presidential election. So, let's take a look at what Joe Biden has said …
September 18, 2020
Insurance for Long-Term Care at Home
retirement

Insurance for Long-Term Care at Home

In the wake of COVID-wracked nursing homes, increasingly more people are looking at options to age in place with long-term care insurance.
September 17, 2020

Recommended

10 Things You'll Spend More on in Retirement
retirement

10 Things You'll Spend More on in Retirement

From reading materials to debt, the demands on your savings during your golden years might surprise you.
September 16, 2020
How to Catch a Rock-Bottom Rate
Buying & Leasing a Car

How to Catch a Rock-Bottom Rate

Rates on everything from home mortgages to car loans are at record lows. We’ll tell you how to qualify for the best rates.
August 27, 2020
Give Your Credit a Boost
Coronavirus and Your Money

Give Your Credit a Boost

When times get tough, your credit profile could take a hit. Here’s how to keep it in shape.
August 27, 2020
The Five Top Consumer Complaints
Smart Buying

The Five Top Consumer Complaints

Here are the top five complaints from a survey of state and local agencies from 19 states.
August 27, 2020