Every time you pay with a credit card, merchants pay banks an average 2% fee. Fortunately for you, banks compete with each other by offering you some of that fee back — as much as 1.5% every year! When looking at a rewards card, keep two facts in mind. First, the inital year is often more generous than the next. Second, certain cards are better tailored to your lifestyle than others. We've reviewed the fine print on dozens to recommend the best offers for you.
5 things to watch out for
Reduce your credit limit and opt out of overlimit
Decide how much you can afford to pay off every month and set your credit limit there with no option to go overlimit.
Don't use your cash back card for a balance transfer. Get a separate balance transfer card.
If you spend AND balance transfer on the same card, then interest on your spend accrues immediately.
Never use a credit card at an ATM. A cash advance is extremely expensive.
The fees and interest are extremely high and you earn no cashback
Always pay the balance in full
Even if you pay 80% of the balance, interest will accrue on all your spending, not just the remaining 20%
Always pay your balance on time
Late payments can cost $35
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