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Card matchmaker: What’s the best credit card for me?

Posted by CreditCardGuru on

Whether you’re looking for your first credit card or another credit card, there are innumerable factors to consider. But a good place to start is honestly assessing your circumstances.

Check out our flow chart for a quick guide – and read on for in-depth advice for specific scenarios.

Just remember: Wanting a certain type of card won’t be enough — you’ll need to meet the issuer’s credit requirements. It’s also vital to read the card’s terms and conditions as well as in-depth card reviews before applying and accruing a credit inquiry.

Card matchmaker flow chart

SCENARIO #1: I want to start building (or rebuilding) my credit

The best card for you will depend on whether you’re a student. If you are, issuers have special options for you. If you’re not and you still need a credit leg-up, consider a secured card. Because you’ll have to make a deposit to secure the credit line, issuers may be willing to take a chance on you – and let you work your way up to a regular card.

SCENARIO #2: I want to carry a balance

Interest charges on even a modest balance will cancel out rewards, so if you plan on regularly carrying a balance, don’t even think about rewards. Your goal should be minimizing finance charges until the debt is gone.

Some cards offer 0 percent interest periods on balance transfers and purchases, giving you as many as 18 months to clear your debt. If you plan to carry a balance outside the intro period, go for a card that has a permanently low APR.

SCENARIO #3: I want rewards, but I don’t want to obsess about maximizing them

Cash-back cards are probably the best fit. Since you’re accumulating cash, you won’t have to worry about fluctuating reward value. Depending on the card, you can put the money in the bank, or use it to cancel out purchases.

Which cash-back card you choose depends on where you spend your money. If you spend a lot in everyday categories like groceries or gas, consider a card that gives extra cash back on groceries and gas. If not, go for a card that gives you a little extra on everything. The Citi Double Cash, for example, gives you 1 percent back on all purchases and then another 1 percent back when you make a payment.

SCENARIO #4: I want rewards, and I don’t mind making a hobby out of maximizing them

You’ll want a card tied to a flexible redemption program. Examples include Membership Rewards from American Express (a CreditCardForum advertising partner) and Chase Ultimate Rewards. Both programs allow you to redeem for merchandise, cash, travel and, in some cases, real frequent flier miles in various programs. Redemption value will vary, depending on which option you choose, but, if you’re strategic, you can yield greater returns than you would with a cash-back-only card — especially if you convert your rewards to airline miles.

Scenario #5: I travel a lot, and I want to be rewarded for it

A travel rewards card is what you’re after. There are basically two breeds of travel rewards card. Co-branded airline and hotel cards let you accrue miles or points toward free stays within the associated chain. Generic travel rewards cards, meanwhile, let you accrue what amounts to cash back that can be used to cancel out nearly any travel expense. Go here to figure out which is best for you.

If you travel in style (or travel frequently for business) and want perks like lounge access, TSA PreCheck, companion tickets and hotel upgrades, go for a premium travel rewards card. Well-known examples include the Citi Prestige and the American Express Platinum.

Once you’ve found your ideal match, consider branching out. Many cards work best in pairs, assuming you can manage them responsibly. Go here to see the credit card combos we recommend.


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Editorial Disclosure: The editorial content on this page is not provided by any bank, credit card issuer, airline or hotel chain, and has not been reviewed, approved or otherwise endorsed by any of these entities. Opinions expressed here are author's alone, not those of the bank, credit card issuer, airline or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

Are there credit cards for teens?

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Because of their credit-building benefits and convenience, it’s understandable that teens might want to get an early start with credit cards – and that their parents might encourage them to do so. But is that possible?

You can legally get a credit card once you’re 18. Yet there’s a parental-supervision option for teens younger than that — and complexities for teens even after they turn 18. teen cards

Option 1: Getting added to a parent’s card as an authorized user

Authorized users have charging privileges on the account, but no responsibility for the balance. The age at which a teen can get added as an authorized user to an account varies by issuer. American Express (a CreditCardForum advertising partner), for example, sets the minimum age at 15, according to a spokesperson. Wells Fargo, Bank of America, Citi and Chase do not have minimum age requirements, according to spokespeople from those banks.

Authorized users under 18 are too young to have credit files and will therefore benefit only from the learning and convenience aspects of card ownership. Yet those over 18 will get credit-building benefits from the card, assuming the issuer reports authorized user relationships to the credit bureaus (and assuming the parent pays the balance on time).

“It’s an opportunity for the child to get familiar with how credit cards work,” says John Szalicki, counseling manager at Cambridge Credit Counseling. “They get the benefits of a card without 100 percent responsibility.”

Yet just because the bank won’t hold the teen responsible doesn’t mean the parents shouldn’t, Szalicki says. Parents and teens need to sit down and talk about the following before the teen is added to the account:

  • Worst-case scenarios: If parents have had bad experiences with credit in the past, they should lay it bare.

    “Parents shouldn’t be embarrassed to tell their 17-year-old, ‘When I was 18 or 19, I misused credit cards, but now I’m older and here’s what I’ve learned,’ ” Szalicki says.

  • Spending limits: Some credit card providers (such as American Express) allow main account holders to set custom limits for authorized users, but many other issuers don’t.

    Regardless, parents need to determine a limit on how much the teen can spend, what the teen can buy with the card and the consequences for failing to comply, Szalicki says. He also recommends that parents limit their risk by adding their child to a lower-limit card.

    Whatever limit they set, parents need to stick to it.

    “Credit card companies aren’t lenient,” Szalicki says. “Teach [your teens] they have to earn their way to a larger credit line. And only if they show they can be responsible, lengthen the leash, so to speak, and give them more flexibility.”

  • Who pays: Some parents may pay for their teen’s charges (within reason), while others might require that their teens pay for all the charges they make. In the latter case, parents can create a good learning experience by requiring their teens to give them the money owed before the card’s due date and then asking them to observe while a parent pays the bill online, Szalicki suggests.

Option 2: Getting a card in your own name

Adults (18 and over) can get technically get cards on their own. Yet the CARD Act of 2009 adds some roadblocks for anyone between 18 and 21:

CARD Act requirements under 21

In short, if you don’t have “independent means of repaying” your balance, you need to get a co-signer.

So what, exactly, constitutes “independent means of repaying”? It depends on the issuer.

For example, here are Discover’s requirements for its student cards:

Discover student credit card requirements

We reached out to a few other issuers to see what types of income they may consider before extending credit to a consumer under 21.

Bank of America: Income from a job (such as a summer or part-time job), but NOT student loans, grants or scholarships.

Wells Fargo: Income from employment (including part-time, seasonal, irregular, military and self-employment); money regularly deposited into an account owned by the young applicant; public assistance; child support; student loans to the extent that they exceed the amount owed for tuition and other expenses.

Citi: Job income; loans, grants, scholarships in excess of a student’s educational expenses (tuition, fees, books, etc.); monetary contributions (such as an allowance from parents) deposited regularly into the person’s bank account.

Keep in mind none of these sources of income is a guarantee that you’ll be accepted, as issuers consider many factors, including your credit history.

For those who go the co-signer route, issuers handle that relationship differently. But, in general, both parties share responsibility for payment and both will suffer credit damage for non-payment.

Think you have a shot at a card without a co-signer (thanks to income from one of the sources above)? One option, Szalicki says, would be a secured card. This type of card requires a deposit in advance to secure a credit line, which can make issuers more forgiving of a limited (or troubled) credit history. Just keep in mind that secured cards often have annual and set-up fees. For college students, student cards are another good option. Eager to begin a life-long relationship, issuers may forgive a thin credit history and issue a student card with a low limit. Some even offer rewards.

If you manage to get a card all on your own before you’re 21, congratulations — just make sure you make it into a solid foundation instead of a pit of debt. Szalicki recommends charging a couple small living expenses every month (gas, for example), keeping your balance low and paying in full. If you need the card for something more expensive (such as emergency car repairs) and can’t pay in full, pay as much as you can over the minimum.

“The goal is to pay it off every month, but if you can’t, I’d go 60 days, tops,” Szalicki says. “Even 90 days may not be terrible with a $500 balance, but that’s behavior you don’t want to continue. Three or four months can easily become six months, and that can become 12.”

Alternative option: Using a prepaid card

Prepaid cards aren’t credit cards, but they offer the convenience of plastic. Because you have to load money on to the card before you can use it, it’s impossible to spend more than you have. However, they typically carry fees, and they won’t help you build credit. This one has reasonable fees, but reloading it can get expensive without a bank account.

Updated Nov. 21, 2014


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Editorial Disclosure: The editorial content on this page is not provided by any bank, credit card issuer, airline or hotel chain, and has not been reviewed, approved or otherwise endorsed by any of these entities. Opinions expressed here are author's alone, not those of the bank, credit card issuer, airline or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

Chart: Card issuers roll out special promotions for the holidays

Posted by CreditCardGuru on

Your cards may see a little more action in the coming weeks – but they can also put a little money back in your pocket. Card networks and issuers often roll out limited-time promos to coincide with holiday shopping, and this year is no different.

Looking for holiday reward tricks you can use with any card?
We asked some reward experts to share their techniques.

2014′s holiday promos are diverse. American Express (a CreditCardForum advertising partner) is again offering statement credits for cardholders who participate in Small Business Saturday – as well as several bonuses for travelers. Other issuers are offering redemption discounts and free shipping via their online malls. You’ll find a couple sweepstakes in the mix as well. And, new for 2014, Visa is offering an incentive to try out Apple Pay.

Check out our chart to find out which holiday gifts your issuer is offering this year.

Credit card holiday promotions and specials for 2014
PromotionEffective datesOther info/requirements
American Express (a CreditCardForum advertising partner)
Small Business Saturday: Register your American Express card to get $10 back via statement credit per $10 spent (up to $30 back).Nov. 29Corporate cards and prepaid cards (aside from Serve and Bluebird) are not eligible.


Instructions for registering your card here.
Beach escapes hotel sale: Get additional 3rd or 4th night at select properties booked via American Express TravelMust book by Dec. 31 and complete travel between Dec. 1 and Jan. 15Can't combine with other offers; must pay taxes and fees on extra night


More info and eligible properties
Virgin Atlantic transfer bonus: Get 35% bonus when transferring Membership Rewards points to Virgin Atlantic Flying ClubEnds Nov. 30Must transfer at least 1,000 points
Hilton HHonors transfer bonus: Get 33% bonus when transferring Membership Rewards points to Hilton HHonors programEnds Nov. 30Must transfer at least 1,000 points
$25 Best Buy e-gift card: When you redeem Membership Rewards points for qualifying productsEnds Nov. 22List of eligible products
$5 back on Starbucks website: Enroll your card in Amex Offers, and get $5 back when you spend $10 or more on Starbucks' websiteEnds Dec. 31One time only
$150 credit for Chicago hotel stay: Book (and stay) at least 3 nights at participating Chicago hotels with your American Express card, and get a $150 statement credit.Ends Dec. 21See list of participating hotels here.
Bank of America
Extra rewards in WorldPoints Mall: Earn 2 bonus points/dollar above base offer with various retailers, including Macy's, ProFlowers, StarbucksStore.com, REI and moreEnds Dec. 28Using third-party coupons may disqualify you.
Barclaycard
L.L.Bean Visa sweepstakes: Every purchase made with the L.L.Bean Visa is an entry to win $250,000.Ends Dec. 31Drawing takes place in mid-January.


More details
Free shipping, discounts and bonus points: Find various holiday rewards offers at RewardsBoost. Varies. Plenty of offers lasting through holiday season.Using third-party coupon code may disqualify you.
Citi
Hilton HHonors transfer bonus: Get 2 Hilton HHonors points (usually you get 1) for every Citi ThankYou point you transferEnds Jan. 8, 2015Must have Citi ThankYou Premier, Citi Prestige or Citi Chairman
40 to 50 percent off on Cyber Monday: Redeem for select electronics in Citi ThankYou catalog for 40 percent to 50 percent fewer points. Ends Dec. 1 at 11:59 p.m. ESTWhile supplies last. View examples of discounts here.
Citi ThankYou Rewards on sale: Gaming, electronics, luggage, and home and garden merchandise redemptions require fewer points than usualVaries. Check online rewards catalog.
Chase
5% back at with Chase Freedom: For purchases at Amazon.com, Zappos.com and select department storesEnds Dec. 31Up to $1,500 in spending. Must enroll in category.
Chase United VIP lounges: 2 malls (one in San Francisco, one in Short Hills, New Jersey) will have VIP lounges open to MileagePlus cardholders. Lounges will feature gift wrapping, snacks and beverages.Nov. 24-Dec. 24More details here.
Discover
5% cash back with Discover it card: For online shopping and department store purchases for Q4Ends Dec. 31Up to $1,500 in spending. Must enroll in category.
MasterCard
Priceless Surprises: Use your MasterCard for automatic entry and chance to win everything from event tickets, to trips, to gift vouchersDec. 31View contest rules here.
Visa
Visa Apple Pay Sweepstakes: Set a Visa card as your default credit or debit card in Apple Pay an make a purchase for a chance to win a $500 Visa gift cardEnds Dec. 31View entry and submission rules here
$100 off hotel with Visa Checkout: Use Visa Checkout to book a round-trip flight on Orbitz and receive $100 off qualifying hotel stay.Ends Nov. 23Not valid on packages. Must book hotel by Nov. 23 and complete stay by June 30, 2015.


More details

Where to find holiday promos

As with coupons, you’ll have to do some hunting for limited-time credit card promos. We found the promos featured in our chart in the following places:

  • Card network and issuer social media pages
  • Card issuer press releases
  • Card issuer rewards portal site. At this time of year, you’ll often find a special “Holiday” section or banner that leads you to the seasonal specials.

It pays to watch your mail and email as well. Your issuer might send you a limited-time targeted offer.

Taking advantage of holiday promos

The cardinal rule of couponing also applies to these holiday promotions: If you were planning on buying something anyway, go ahead and take advantage. If you weren’t planning on buying it, don’t let an offer of extra points or a few bucks back lure you into unplanned spending. The couple hundred dollars extra dollars you spend will likely dwarf any kickback you’d get from the offer.

Any holiday promos that we missed? Tell us in the comments.

Updated Nov. 20, 2014


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Editorial Disclosure: The editorial content on this page is not provided by any bank, credit card issuer, airline or hotel chain, and has not been reviewed, approved or otherwise endorsed by any of these entities. Opinions expressed here are author's alone, not those of the bank, credit card issuer, airline or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

How much are your reward points actually worth?

Posted by CreditCardGuru on

When comparing rewards cards, it’s vital to determine which gets you the best value. Unfortunately, comparing rewards currencies is rarely like comparing apples to apples.

Our guide will give you the tools you need to make sense of your rewards.

Step 1: Which types of reward currency do you have?

Depending on which card you have, you might earn cash back, points, miles or “miles” (that actually function more like cash back). Here’s a rundown:

  • Miles (in the traditional sense): These are what you earn from an airline frequent flier program (or a credit card affiliated with one). Once you have enough, you’ll redeem them for a free flight.
  • “Miles” (in the non-traditional sense): These are what you earn from a general-purpose travel rewards card (like the Barclaycard Arrival, for example, or the Capital One Venture). You generally redeem them for a statement credit against already-purchased travel.
  • Points: A broad term that can be used to refer to either of the above (depending on the program), as well as hotel points (which are redeemed for a free stay). The term may also be used to describe what you earn in flexible rewards programs, such as the Membership Rewards program from American Express (a CreditCardForum advertising partner). In such a program, your points can be redeemed for cash, merchandise, gift cards, traditional frequent flier miles and lots of other options.
  • Cash back: The simplest type of reward. You accumulate real money. Once you’ve reached the minimum redemption amount, you can redeem for a statement credit, bank account deposit or (sometimes) a check.

Step 2: Compute value per point

In general, you’ll use this equation to determine how much each of your points or miles is worth:

Basic equation

On most credit card sites and blogs, value is expressed in cents per point. If you’re plugging a dollar amount into the equation, you’ll need to use this version, to convert dollars to cents:

Basic equation in cents

So how do you determine the cash value of the reward? Look it up. If you’re redeeming miles for a plane ticket, find the cost of that flight on the airline’s website. If you’re redeeming for merchandise, find how much the item would cost in cash. If you have non-traditional miles, log in to your card’s reward site to see how many miles you need for a statement credit of a certain amount.

Let’s look at an example:

Say you want to redeem for a Garmin. In the Barclaycard Arrival’s program, that requires 33,700 miles:
Merchandise point value

To get the most current cash price, check a site like Amazon:

GPS cash price

Now do the math:

Garmin redemption

Step 3: Calculate return on spending

Point value is only part of the picture. Even if each of your points is very valuable, you wouldn’t want a card that makes you work hard to earn them.

That’s why computing return on spending (rewards as a percentage of money spent) is important.

To do that, you’ll need:

  • The value of each point in cents (which we computed above)
  • How many points/miles you earn per dollar spent

Here’s the formula:

Generic return on spending forumula
Using the Garmin example from above, if you were using a card that earns you 2 points per dollar on your spending, you’d plug in the numbers like so:

Percent return equation

Step 4: Factor in other variables

A few things can muddy the waters. Many cards have bonus categories (groceries or restaurants, for example) that give you a different number of rewards points per dollar spent.

Other cards refund a certain percentage of your points when you redeem, which kicks up your return on spending somewhat. The Citi AAdvantage Platinum Select, for example, gives you 10 percent of your redeemed miles back. Similarly, the BankAmericard Cash Rewards card gives you a 10 percent bonus if you redeem into a Bank of America checking or savings account.

So this time let’s walk through a more complex example. Let’s say you have a card that earns 2 points per dollar on travel and gives you a $100 statement credit for every 10,000 points redeemed. Let’s also assume that it gives you a 10 percent refund when you redeem.

You want to calculate point value and return on spending for travel.

First, we calculate how much each point is worth.

A $100 statement credit requires 10,000 points, so:

Example redemption 1

But, wait you get 10 percent of your points back each time you redeem.

So, in reality, you’re redeeming just 9,000 points to get a $100 statement credit:

Redemption bonus equation

Now, we calculate return on spending on travel. You earn 2 points per dollar, and each point is worth 1.1 cents, so:

Percent return on travel spending

What’s considered a good value?

The rewards community generally agrees you shouldn’t settle for a point value of less than 1 cent each or less than a 1 percent return on your spending.

Yet it’s important to remember that point worth and return on spending aren’t fixed numbers. They’ll often vary within each card, due to spending bonus categories and more-generous redemption options. In general, merchandise redemptions tend to give you a less-optimal point value, while miles redeemed for first-class international tickets tend to give you the best. Statement credits against travel and cash back generally fall somewhere in the middle.

Because of this variation, it’s important to run the numbers and make sure you’re picking the best redemption option for your card –- and picking a card with redemption options you’ll actually use.

Below is one card that has a variety of redemption options –- followed by one with a straight-forward cash-back redemption system if you don’t want to crunch any numbers at all:

Last updated Nov. 14, 2014


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Editorial Disclosure: The editorial content on this page is not provided by any bank, credit card issuer, airline or hotel chain, and has not been reviewed, approved or otherwise endorsed by any of these entities. Opinions expressed here are author's alone, not those of the bank, credit card issuer, airline or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

8 rewards card tricks for the holidays

Posted by on

You may not be able to escape spending extra during the holidays. But you can offload some of the burden onto your rewards cards.

From earning extra rewards you can use later to taking advantage of your cards’ perks, here are 8 ways to milk your cards during the holidays. credit card rewards

1. Harness your card’s portal

Some rewards cards have shopping portals that let you click through to partner vendors for bonus points, miles or cash back. Examples include Chase Ultimate Rewards, ShopDiscover and Barclaycard RewardsBoost.

The process is pretty seamless: Log in to your card’s portal, type in the merchant or product, click through to the retailer’s site, make your purchase and get bonus rewards automatically. Still, says David Scharfstein, who runs the blog Points on the Dollar, portals are “one of the most overlooked aspects of online shopping.”

“It’s just free money that people are leaving on the table for almost all online purchases,” he says. “It’s amazing how many stores are participating in these portals.”

Shopping portals can be an especially powerful tool during the holidays. You can use them for travel (some online travel agencies partner with portals), presents, gift cards and decor. In many cases, you’ll find that you can earn double points, but, you can often find deals for 10 points or more per dollar spent.

“Flowers and magazines are usually the two big ones,” Scharfstein says. “You can almost manufacture points that way.”

If you have multiple rewards cards, avoid the chore of logging in to multiple portals and use a portal aggregator, Scharfstein suggests. Examples include Evreward and CashbackHolic. Type what you’re looking for into the search bar and select the portal that gives you the best deal. Note that accuracy varies, and some aggregators may not include all credit card shopping portals.

2. Cut the cost of travel

Renting a car when visiting family? Quite a few cards throw in rental car insurance for no extra cost, points out John Espey, founder and CEO of Reward Summit, an app and browser add-on that helps consumers choose cards and maximize their benefits.

“You’re basically avoiding an extra $20 or $30 a day,” he says.

Staying in a hotel? Unlike some frequent flier programs (which often limit reward availability during peak travel times), hotel programs for many major chains have this policy: As long as a room is available for cash, you can book it with the same number of points you’d use at any time of the year.

“You can get huge value from hotel rewards by using them over the holidays,” Scharfstein says.

Still facing sticker shock at the price of visiting family? It might be time to cash in some miles you earned with a generic travel rewards card, such as the Barclaycard Arrival or Capital One Venture. Such “miles” act as a cash-back statement against travel expenses and are often worth 1 cent each. So if you bought a $500 plane ticket and have 20,000 generic miles or points, “now your flight is $300,” Scharfstein says.

3. Enlist a rewards app

If you have a wallet full of cards with various (and sometimes rotating) bonus categories, reward apps can help you decide which one to pull out at the register.
WalletUp is one example, and it will also suggest cards to apply for, based on your shopping habits. Reward Summit will also estimate the dollar value of extended warranties (a benefit buried in the fine print of many cards) and compare it to the cash back you’d get on other cards, “so you can make as much of an apples-to-apples comparison as you can,” Espey says.

In some cases, the extended warranty can be worth more than the miles or cash back, especially for large purchases.gift-card-display

“If you’re not spending a lot, the decision you’re making may not have a huge impact,” Espey says. “But if you’re buying a $3,000 MacBook Pro for someone, it can make a big difference.”

4. Involve gift cards in your strategy

Some cards give bonus cash back at grocery stores. Grocery stores sell gift cards. You do the math.

“If I’m shopping at Best Buy and it’s a big-ticket item, I’ll go to the grocery store, buy the gift card and then go use the gift card at Best Buy,” Scharfstein says. “But that’s probably only worth the time for big-ticket items.”

5. Watch for holiday promotions

Rotating-category cards (such as the Discover it and the Chase Freedom) offer holiday-friendly bonus categories in Q4: Online shopping and department stores for the ‘it,’ and Amazon, Zappos and department stores for the Freedom.

But sometimes issuers throw in a few more holiday surprises, such as discounts on point redemptions, bonuses for transferring rewards and more.

“A lot of people just don’t look at those,” Espey says. “So I’d recommend going to your credit card company’s website and seeing what kinds of deals are going on right now.”

6. Think twice when redeeming for merchandise

If you have a pile of rewards points, you might not have to pay cash for gifts, as many cards allow you to redeem for electronics, cookware and many other items on your list.
However …

“You’re never going to maximize the value of your points that way,” Scharfstein says. “Those options exist to get consumers to trade in their points for less than they’re worth.”

If you have a lot of extra points to burn, or if you’re trying to save cash, redeeming points for gadgets might be the right move. But before you pull the trigger, look up the cash price of the item online to make sure you’re not getting an absolutely dismal value.

“Just make sure you’re not trading in $500 worth of points for a $200 item,” Scharfstein says.

Also note that redeeming for merchandise is not like shopping online. It can take weeks for items to arrive, meaning they might not arrive in time for his year’s holidays, even if you order soon. Check out the fine print on Barclaycard’s RewardsBoost:

redeeming for merchandise

7. Put together a killer card combo that rewards you all year

An analysis by Reward Summit found that those who changed their behavior with existing cards saved an average of $500 to $700 over the course of a year, Espey says. Those who made an effort to update their card portfolio with better cards saved upwards of $1,000 to $1,500.

So, it’s obviously important to think beyond the holidays and pick a lineup of cards that rewards you for the long term.

“You really shouldn’t just have one card if you really want to get the maximum benefits,” Espey says.

Espey recommends having the following in your wallet if you’re trying to maximize cash back:

  • A card that delivers elevated rewards on all purchases. The Citi Double Cash, for example, gives 1 percent back on all eligible purchases and another 1 percent when you pay your balance. The Fidelity Rewards card from American Express (a CreditCardForum advertising parter), meanwhile, gives 2 percent cash back on all purchases (although you’ll have to open a Fidelity account). Whichever you go with, make it a catch-all for purchases that don’t fit within other cards’ bonus categories.

    “You should have one card you know that you can use for most purchases that’s going to pay the highest percentage,” Espey says.

  • A card from a place you commonly shop. Frequenting Target for gifts, food and decor? The REDcard gives you 5 percent back on Target purchases. Online shopper? The Amazon.com Rewards card from Chase gives you 3 percent back on Amazon purchases.

    “It’s amazing how many people are spending thousands of dollars a year at Target, for example, and they aren’t getting 5 percent back,” Espey says.

  • A card with 5 percent rotating categories. As mentioned above, such cards tend to have holiday-friendly categories. But don’t rush out and get one of these cards just for the holidays if you won’t use the rest of the cash-back calendar, Scharfstein says. Rotating-category cards generally reward you 5 percent on $1,500 category purchases each quarter. So even if you max out the holiday categories, that’s $75.

    “The question is if it’s worth the inquiry to save a little extra on holiday shopping,” Scharfstein says, noting that another type of card (such a travel rewards card) with a bigger sign-up bonus might better justify a credit inquiry.

8. Pay your balance

Planning on carrying debt into the new year? Forget what you just read, and go for a low-interest card, or one that offers 0 percent on purchases for an intro period.

“If you’re not paying off your balance in full, don’t worry about the rewards,” Espey says. “Rewards matter so little if you’re paying interest.”

For more holiday rewards tips, check out our Google Hangout with CreditCardGuide.com.

For more holiday rewards tips, check out our Google Hangout with CreditCardGuide.com.


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Editorial Disclosure: The editorial content on this page is not provided by any bank, credit card issuer, airline or hotel chain, and has not been reviewed, approved or otherwise endorsed by any of these entities. Opinions expressed here are author's alone, not those of the bank, credit card issuer, airline or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.