How to maximize cash back with your credit card

Cardholders who are smart should try to get the most out of their perks and rewards all year long. If you use a credit card with cash back rewards, it's important to know how to get the most out of them. Read on to improve your cash-back skills and find out how to make the most of your rewards.

1. Think about how you spend money and find a card that fits you.
Before you change how you use your credit card or think about getting a new one, it's important to look at your cash flow. How much are your monthly expenses? How often? What do you spend the most money on? What do you need or want from a rewards credit card in the end?

Start by using an app or pen and paper to figure out how much and what you spend each month. Make sure you know where your money is going, whether it's to feed your soul with home cooking or to rack up travel miles in your car or with your favorite airline. This will help you choose a card that will reward you for spending you're already doing.

If you know how much you spend, you can figure out what your rewards will be each year (they are often higher the first year if your cash back card comes with a bonus) and decide if an annual fee is worth it. If you don't spend enough on a credit card every year to cover the annual fee, it's probably not the best choice for you.

Once you know how you use your credit card, you can figure out what kind of card fits your spending habits and lifestyle the best.

Common ways to spend money
Most of the time, a flat-rate cash back card is the best type of card for everyday spending, since you'll earn the same amount of rewards no matter what you buy. Even though 2% cash back makes a lot of sense, a card with a slightly lower flat rate may offer more benefits that make it a better fit for your spending.

If you eat out or order takeout a lot, there are cash back cards that give you a lot of money back on dining and entertainment purchases. If most of what you buy is food to cook at home, you might be better off with a credit card that gives you points for spending at supermarkets. Also, a card that gives you rewards for buying gas makes more sense if you have a long commute or go on road trips often.
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