March 13, 2009
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News: Success with Credit Card Rewards.
Some credit card holders get lucky with rewards points. Susan Hodara sure did. And all she had to do was buy groceries and other stuff on her credit card in her normal fashion. Her AMEX credit card rewards her with 5% cash back all year long whenever she charges purchases for groceries, gas, or drugstore items. Her take on it is: "That's a real incentive for me to use this card and not another card."
She was very impressed when she received her statement and found that her card had been credited with $681. It really put a dent in her credit card debt. Consumer Reports have awarded AMEX with the highest rating for pleasing their customers with this service. Their advice is that it "really pays to shop around" for the best credit card deals. One caveat they do warn about is how important it is to always pay the card off every month. Otherwise, the finance charges will eat up any gains you might have.
Consumer Reports has recently conducted a study on which are the best going credit card deals today. They have provided a chart of this work on their website. They have done most of the work but they still strongly advise consumers to read the fine print. Often times there are limits on how much you can save and even worse, sometimes the rewards programs even dictate where and how you have to shop. Other times, people don't realize that they have to call and ask their lenders in order to receive the benefits they're entitled to. Otherwise they go without.
When choosing a plan, try to get one without annual fees or limits and where the points don't expire. Susan's plan is the Blue Cash from AMEX. It offers 5% real cash back on most types of spending until you charge $6,500 in a year on the credit card. After that, the rate drops to only 1% cash back. Capitol 1 comes in a good second with their ‘No Hassle Rewards' program. They offer 2% cash back on gas and groceries. The trick is to use the card often but always pay it off every month. For a summary of Consumer Reports research, please refer to my article series entitled: "The Best Bang for the CC Rewards Bucks".