Get the most cash back from your credit cards

By Chris FicheraConsumer Reports

Choosing a rewards credit card isn’t always just as simple as picking the one in the ad that seems to pay the most back. Making your points grow involves knowing how to take advantage of signup bonuses and strategize your spending. You'll also have to know which pitfalls to avoid so your points aren’t taken from you or you miss out on cash back you could have earned. Follow these tips and tricks to maximize your rewards.

  • Wait for a big signup offer. Log on to sites such as and to find the best point deals. For example, in May, posted a link to an unadvertised card offer for 75,000 American Express points that lasted just 24 hours. But also check your snail mail. Amex sends its most lucrative 100,000-point offers through direct mail with invitation codes only the recipient can use.
  • Watch for seasonal bonus categories. For example, the Chase Freedom, Discover It Card, and Citi Dividend Platinum Select each give 5 percent back in seasonally rotating categories, some of which might be gas spending in the summer months, or home improvement expenses in the spring. But you have to opt in each quarter, or you get nothing. And there are caps (often $1,500) each quarter. And one card, the Citi Dividend, limits rewards to a stingy $300 in total earned per year, so despite its 5 percent back in certain categories, you’ll never earn that much. But if you would benefit from the seasonal categories, put the signup date on your calendar and attach a post-it to the card in your wallet with that quarter's categories so you’ll remember to use them.
  • Understand spending thresholds. Besides the Citi Dividend mentioned above with its $300 annual cap on total rewards, many other cards have caps in individual spending categories. For example the Amex Costco gives 3 percent back on up to $4,000-worth of gas purchased in a year, but then just 1 percent back on gas purchases beyond that. Conversely, some cards give higher rewards when you spend more than a certain amount. The Walmart Discover pays just .25 percent on total annual purchases up to $1,500, .50 percent on total purchases from $1,500.01 to $3,000, and then 1 percent on total purchases over $3,000. Some premium cards, such as the Citi Prestige, pay extra to big spenders. The Prestige gives bonuses if you spend more than $50,000 and even more if you top $100,000 in a year.
  • Find unconventional things to spend on your card. You may be able put your rent, mortgage, college tuition, car payments, health-care expenses, or utility bills on your credit cards. But check for “convenience” fees, which might negate any possible benefit. If the fee is just 1 percent and you earn 2 percent back on your credit card, it would be worthwhile. A new strategy is to buy prepaid cards with your credit card, rack up the points, and then use the prepaid cards to pay for bills you are barred from paying for with a credit card. The better prepaid cards offer online bill pay and free checks. But, prepaid cards can carry their own fees, so pick one wisely.
  • Redeem points in the right place. Card issuers may give you bonuses, or discounts, for spending points through partner retailers, or their own travel agency. For example, earning 40,000 points with the Chase Sapphire Preferred gets you $500 worth of travel spending if used through Chase’s travel agent, but only $400 with an outside site such as Shopping at a card issuer’s “online mall” may earn you extra cash.
  • Don’t neglect your points. Check your card’s terms and conditions to see if you lose any points you don’t use in a calendar year. If you’re planning to cancel a card, try to use points before you do; they’re likely to be wiped out when you close an account. And some cards cancel rewards for late payments, so set up payment alerts and reminders.

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