Credit cards get a bad rap for getting people into debt and then charging high interest rates. If you are irresponsible financially avoid credit cards like the plague, they will ruin your finances. However, if you know what you are doing and you are disciplined enough to only buy things you can afford to pay off quickly, it is very possible to earn rewards using credit cards at no cost!
Many credit cards offer bonus points for every dollar you spend. They are obviously trying to give you an incentive to buy items with the card so that they can profit from charging you interest in the future. The incentives they give you, or points, are mild, but after many purchases they begin to add up. Many cards offer around 1% back in cash or bonus points which can be redeemed for gifts. The best cards offer 2 or even 3 percent back on every purchase. Suppose you buy $15,000 worth of items a year on your card, at 2% cashback you are looking at receiving $300 yearly while doing no work! In addition to the money or gifts you could be eligible for you are also helping your credit score if you act responsibly.
Here are 4 easy steps on how to earn bonus reward points through your credit card:
1. Research and apply for an appropriate card! You cannot earn credit card reward points without having a credit card that offers such bonus points. Thankfully it is easier now more than ever to find a card that fits your needs and apply for it thanks to the internet. Make sure you look at several attributes of the card such as how many reward points the card pays out, what you can redeem the points for and how difficult it is to be approved for the card as well as many others. Later in the article we will go over a few cards that you may be interested in. Remember that the worst thing a credit card company can say to you after applying is “no”, so do not be afraid of rejection.
2. Spend as much money as you possibly can on the card. Most bonus point reward credit cards offer one point for normal transactions using the card and extra points if you buy special items. Use your credit card when you make normal purchases like buying gas, going to the grocery store and buying airline tickets. Do not make a purchase just for the sake of racking up reward points; you will be defeating the purpose of saving yourself money by buying things that you do not need.
3. Pay off your charges quickly! The average credit card has an APR, or interest rate of 14.7 percent! Even if you neglect paying off your balance in full for a short period of time, a couple of months for example, you will cost yourself dearly and the reward points you rack up will not come close to making up for it. You should always know the length of the grace period on your credit card. The grace period is the amount of time you have to pay off your debts without paying interest on your charges.
4. Redeem your points! Some credit card companies let you redeem your points for cash or a prepaid debit card. Other cards allow you to buy electronics, airplane tickets or other random items. If you followed step one, meaning you did enough research on cards to begin with this step should be easy because you know exactly how many points you have available for redemption and exactly what the points can translate to.
Best cards:
Citi Forward Card
This card is very rewards oriented. For every dollar you spend on restaurants and entertainment you will be credited for 5 bonus points, for every dollar you spend on other purchases you will receive one point. There is no annual fee as well! The intro apr is 0% for 12 months on balance transfers and 7 months on purchases! You will need very good credit to qualify for this card, but those who can qualify for this card should definitely give it a second look.
Chase Freedom Visa
This is another great card that rewards its customers for every purchase. My favorite thing about the card is that Chase offers 100 dollars in bonus cash back after you make $500 in purchases within the first three months you obtain the card. You get 0% apr for the first 6 months you have the card on purchases and 0% for the first 12 months on balance transfers. There is no annual fee, however this is another card that requires a very good credit score. IF your score is in the mid 700’s or higher you should be good to go.
Capital One No Hassle Cash Rewards Credit Card
The name of this card alone is a mouthful, but it is a card that you should consider. There is a small annual fee of $39, but you should make that up and more after a month or two of purchases. You will not have to pay interest until October of this year if you apply today! The APR after the initial period is higher than the other cards, around 14% but only a fair credit score is needed to qualify for this card.