Rewards credit cards

This is a guest post written by Tom T.  He runs FindCashBackCards.com, a site that helps people save money using reward-based credit cards.

Whether you’re shopping online or in a store, there are many ways to save.  What many people don’t realize, however, is that you can save a good amount of money when you use your credit card.

How to save with rewards cards

As long as you have good credit, you can earn a decent amount of returns, some as high as 25%!  This is a good chunk of change when you want to save money on your purchases.

If you don’t have a rewards credit card in your pocket yet, there are a few things that you’re going to want to look out for:

1. Make sure that you have good credit:  If you don’t have good credit, you probably won’t be approved for a rewards card.
2. Get a card that benefits you:  With cards like these, you can get rewarded for particular kinds of purchases. For example, one card may give you more back on clothing purchases, while another will give you more back on gasoline purchases. It’s up to you to see what’s going to give you the most back.
3. You shouldn’t pay fees:  Watch out for reward cards with fees, especially if you’re not going to use it a lot. It makes no sense to pay a $79 annual fee, for instance, if you’re only going to use the card enough to earn $50 worth of rewards. Fees generally offset your rewards.
4. Avoid accruing interest: Always pay your bill off in full, so that you don’t end up paying more in interest than you earn in rewards.

How these rewards cards can work for you

Let’s say that you sign up for a card that gives you 3% cash back on everything, and then you go out and purchase $100 worth of items. After you pay your bill in full, the credit card company will give you a $3 credit, which can then be redeemed according to their terms and conditions. Whether it’s each month, every six months, or each year, you will want to read the terms to know when you’ll get this credit. Most will send you a paycheck in the mail.

When you’re ready to apply for a rewards card, make sure you read the terms and conditions and always be wary of scams.  For even more information about rewards cards, visit the CAW’s guide here.