Every time you swipe your credit card, the retailer pays about three percent of what you spend to the credit card company. Want some of that money? It’s yours if you know how to choose the right card:
- Cash back Do an internet search of credit card companies that pay cash back. Discover Card,Capital One and Chase routinely offer one percent back on all purchases. But you can usually get more if you accept your rewards in the form of gift cards or merchandise. Make sure the rewards do not expire. Before you call and redeem your cash, do some research. At different times of the year, credit card companies will feature certain merchants. You’ll receive a higher percentage if you accept gift cards from those retailers. Keep checking the companies’ web sites. Often they offer special cash back incentives of up to five percent if you spend in certain sectors, like entertainment or groceries.
- Airline miles Be careful with these cards. The miles may expire. You might receive all your miles with a certain airline and then that carrier stops flying out of your city. Or the black-out dates are so restrictive, you may find it difficult to even use those miles. Taking cash back may be a better alternative.
- Department store cards These can be enticing. Not only do you receive points with every purchase, the stores often offer double points during certain times of the year and on select items. You’ll also be privy to special sales and buying opportunities for card holders only. Just make sure you aren’t tempted to over-spend at these stores just to get more points.
- No annual fee The deal may sound great because you’re getting all this cash back…Until you realize the high annual fee costs you a lot more than the small one percent savings. Never pay an annual fee. If you find a card you really like with a yearly charge, contact the company. They may waive it to get your business. If not, find another card.
- Changing deals You have to be ready to change credit cards if the deal that lured you in suddenly disappears. Some companies will offer an incentive like five percent back on gas, then take it away after 12 months. You might not even realize it’s gone unless you look at your statement carefully.
Bottom line, If you have good credit, you are in the driver’s seat. Pay your entire bill every month and make the credit card companies work for you.