With all the cashback and reward offers out there, you could make a good return on your spending by choosing the right credit cards. But if you aren't careful, you could also become one of the many people dealing with credit card debt, and once you're stuck with that, it can be tough to pay off.
To make credit cards work for you, here are a few helpful tips and tricks:
Maximize Your Signup Bonuses
The typical credit card rewards rate is 1 percent. That's one percent cashback on every purchase, or 1 reward point/frequent flyer mile per dollar spent, which is generally considered to be worth about 1 cent.
Many cards have better rates, but even then, you're probably looking at 2 to 3 percent. That's a decent return, but it's nothing huge.
The real way to get plenty of cashback or rewards is credit card signup bonuses, which can often be 50,000 points or more for spending a certain minimum amount within a specific timeframe after getting the card.
To maximize your credit card rewards, you need to apply for new cards periodically to get more of those big signup bonuses.
Pay Everything You Can with a Credit Card
Your credit card is most likely the only option you have to make a return on your spending, as you certainly don't get that when you pay with cash or your debit card. So why not make the most of it? Put all the expenses you can on a credit card.
When you do this, you make sure you earn as many points as possible. This also helps you reach the minimum spending on any credit card signup bonuses you're after. You can even combine your credit card with other types of financing to keep getting points. Let's say you've gotten title loans in Tampa to pay pressing expenses. You can still pay those expenses using your credit card, and then pay your credit card bill with a title loan.
For the best results, see where your credit cards earn bonus points and match your spending accordingly. If you have a Chase Sapphire Reserve that earns 3 points per dollar spent on dining, put all your bar and restaurant tabs on that.
Never Pay a Cent of Interest
If you follow the two tips above, you'll earn far more in cashback or rewards than most consumers. But to ensure that you're actually making money from this, you need to avoid getting charged any interest.
Fortunately, there's a simple way to avoid interest charges. You just need to pay whatever is listed on the statement balance every month. The current balance is also an option, but the statement balance is what's important in terms of whether or not your card issuer charges you any interest.
None of the tricks above are that hard to implement. All you need to do is keep up with credit card news a bit to see what the best signup bonuses are. And, of course, stay disciplined financially to avoid interest charges. Don't spend recklessly just because you have the credit for it. Make your credit card beneficial for you instead of for the card issuer.