Reward Credit Cards

It is estimated that an average American has 6-8 credit/charge cards in their wallet. Paying with credit cards makes spending money easy. However, I cannot stress how important it is to remain current with payments and taking all precautions to avoid spending more than within one's means. With that said, I would like to talk about the benefits of having multiple credit cards.

First of all, credit cards are accepted almost anywhere, nowadays. This gives the average consumer choice. Choices in brands, choices in rewards, choices in payment. With recent bills passed to monitor and regulate debit and credit cards (see: Credit Card Bill of Rights), banks are no longer to apply such steep overdraft penalties - where they make a lot of money from - and therefore offer less benefits and rewards for using a debit card. Intern, this makes using a credit card even more attractive.

Given the economic times and what you are personally looking for in credit card rewards, I have found it hard to say "no" to cash back. You may be able to earn airline miles or points to be later used on merchandise, but when the economy is down, nothing is more beneficial than simply earning money back which can be spent on necessities, instead of luxuries. Credit card companies can offer these rewards with no annual fees to the holder, so look for a brand that has none of these annual fees.

Additionally, there are many websites that show what you can qualify for and based on what you are looking for, can search for what cards best suite your needs/wants:
http://www.billshrink.com/
Also, a popular thing for credit cards to do is to rotate rewards. I recommend keep track of these very well, perhaps even writing them down. Credit cards often will offer 1% cash back on purchases, up to an annual maximum and 5% in certain catagories which likely rotate. This means you should be keeping track of how much you earn on each card annually as well as what they give you the most cash back in. Also, you may have to re-apply for 5% cash back in catagories quarterly or monthly. So keeping track and remembering to do this is very important.

With that said, holding a credit card establishes credit, so as long as you use each card at least a handful of times a year (aim for at least once a month) and remember to pay them off, I recommend having between 2-6 cards in your wallet. Each with maximum rewards in different places and from different companies (Visa, Mastercard, Amex, Discover). Remember which card to use at different locations (grocery, home improvement, retail, clothing, gasoline, etc) based on their bonus.

Try to double use credit cards as much as possible. For example, use a credit card to get rewards when purchasing gift cards at discounts. Or when paying bills, instead of writing checks or directly withdrawing from a checking account, try paying with a credit card to get these rewards. Also, hold a nice variety, for example if you regularly go to one gas station, look into a card they may offer which may give you 3-5% cash back all the time at their facilities.

Again, I cannot stress enough the value of shopping around when looking for a new credit card, monitoring purchases and rewards, and spending within your limit to be able pay off cards on a monthly basis.