When you're using your card and you want to capitalize on the rewards, there are some things that you should remember at all times.
NEVER spend over your head: always buy what you can afford. If you find that you can't afford something, don't buy it. You have to treat this card as if it were cash. If you can't do this, don't get one.
ALWAYS pay on time in FULL: if you can't pay in full, you're not going to take advantage. Why not? You're going to end up paying more in interest rates at the end of the billing cycle rather than the rewards you're actually going to get. This isn't good.
Now that you know what you need to do and can't do with a card, I'm going to show you how a cash rewards credit card works –
There are going to be cards out there that will give you multiple points for particular categories. For example, a card company may give you 3 points back on gas, 2 points back on groceries and 1 point back on everything else. Now, don't get points confused with cash because it will work the same in the long run. Generally, you can exchange these points for gift cards to just about anywhere. If you want cash, the worst case scenario, you can sell them on ebay.
Now, let's use the above example and let's say your spending looks like this –
You spend $1,000 on groceries a month
You spend $300 on gas for the month
You spend $1,000 on anything else
We have a grand total of $2,300. Now, we can break this down to show you how much you're going to get on your cash rewards card.
For the first category of groceries, we are going to get 2 points back for every dollar we spend. We spent $1,000 and we get 2,000 points. For the gas, we get 3 points back. For the $300, we get 900 points back. For everything else, we get a simple point back. For the extra $1,000,, we get 1,000 points. This leaves us with 3,900 points!
Now, the question is what can I get with 3,900 points? With some of the cards I have worked with, I have received $50 gift cards to just about anywhere from 5,000 points but this differs but I'm hoping you get a good idea. It really isn't that hard to build up the points. In fact, it's quite simple! You just have to follow the rules above and find a card that suits your spending habits. As long as you use it for most purchases, you're going to take full advantage of your everyday spending.
