From Debt.com
If you've got a credit card, maybe you just accept that paying interest and carrying a balance is the American way. But paying hundreds of dollars in interest to your credit card issuer each year doesn't have to be a way of life.
If you have a rewards credit card and use it responsibly, you can earn credit card rewards while avoiding paying interest on an account that's fully managed by your card's bank.
Obviously, if you've already got credit card debt, pay that off before you apply for a new rewards card, since the last thing you want to do is add more debt to your life. Also, save at least $1,000 in an emergency fund so you don't end up putting unexpected expenses you can't pay off right away on your fancy new rewards card.
With that said, scroll or swipe through to see four ways to make your credit card company pay you...
Apply for a card with a sign-up bonus
Don't be lured by the card's sign-up bonus alone. Remember, the bigger the bonus, the more money you'll have to spend to receive it. For example, if you apply for a rewards card that pays a $500 bonus after you charge $5,000 in the first three months but don't usually spend that much for expenses on a credit card, you'll end up buying things you don't need or can't afford in order to receive the $500 bonus.
If you have to charge so much to get a bonus that you can't pay the balance off every month, consider a card that pays a smaller bonus, maybe $150 cash back after you charge $500 in the first three months, an amount you would already charge in that time frame. Then redeem the $150 as a statement credit.
Choose the right rewards card
A card that offers 5 percent cash back on wholesale club purchases and restaurants won't do much good if you're not a wholesale club member, and you're making most of your meals at home to save money.
An airline rewards card won't actually save that much on airfare if you're paying an annual fee plus interest every month on a big balance from all those purchases you made to earn points. Take your time reading credit card offers, then choose a card that's going to earn cash back rewards for things that you already purchase.
Read the terms & conditions
So boring, right? But the terms & conditions tell you everything you need to know about whether a rewards card is right for you. Are there rotating categories every quarter where you have to reactivate your card to be eligible for extra points? Do rewards convert to airline miles and with which airlines? How can you redeem your points and how often? Are there restrictions on eligible purchases for the sign-up bonus? Can you get cash back or do you have to get a statement credit? Find out before you apply.
Pay your purchase off right away
I pay my utilities with my rewards card and then pay the card off within the next day or two. In fact, anything I charge on the card, I try to pay immediately. The key is to charge only things that you already have money in your account or soon on the way to pay for in cash. The rewards add up, and as long as you pay the full balance monthly, you won't have to pay interest.
With these methods, your cash back rewards will pile up fast. Before you know it, you'll have enough to pay a month's utilities, splurge on grocery items, buy an airline ticket or pay down debt. Then you can use your credit card to reward yourself, not the credit card company that issued it.
