I’m guessing a typical response would be somewhere in the middle of these:
“Dude, quit trying to scam me, I’ll never fall for that crap. Now let me get my money from Nigeria. Apparently I have an inheritance.”
“That would never happen, so I have no reason to assume it’s legit.”
“That sounds intriguing, but you know the saying, 'if it’s too good to be true, it probably is' ”.
“Sounds great, but I’m guessing it’s risky. Tell me more.”
“Tell me how, I want this free cash!”
Here’s your hint; actually start looking at your “junk” mail. On a monthly basis you probably receive a number of thick, classy looking envelopes depicting something similar to the picture below. Look how happy they are! Don’t you want to share in their joy?
Okay fine, it’s all those pesky credit card offers. The ones you immediately rip in half without even opening. So now I’m going to say something else that’ll probably cause many of you to throw up in your mouth.
STOP THROWING AWAY FREE MONEY AND ACTUALLY LOOK AT THE OFFERS!
I know, every financial/frugality website says that credit cards are the devil!! They’re not. Not even close. In fact, I think credit cards are great. They’re essentially paying me to take a free short term loan. Plus, they offer all sorts of perks from car rental insurance, to retail discounts, to free flights, to pure cash. And right this second credit card companies are tripping over themselves trying to get you to open an account with them. They’ll even pay you ridiculous amounts of money to do it.
I’m guessing most of you would run like a rabid badger was chasing you just to collect a $20 bill blowing down the street. Why not make it easier and less embarrassing on yourself.
By now you’ve probably figured out I’m specifically referring to the high rewards credit cards. Before I dive into why everyone should be using them, and charging absolutely everything possible to them, let’s first remove the stigma around credit cards. If you’ve read my previous posts, you understand my position on credit cards. Don’t ever carry a credit card balance! What I didn’t say is to never use them. I use a credit card for absolutely everything possible. Why the hell wouldn’t I? Last year they paid me close to $1,000 for doing nothing. This year I’m aiming to beat that using both my regular rewards and bonus offers on new cards.
Being that there are a numerous credit cards constantly entering the market, there are very few reasons why anyone should be using a card that either has no rewards, or something less than 2-3%. Both Nerdwallet and WalletHub's Best Rewards Credit Cards give a great breakdown on the most popular cards available. Additionally, just Google "high rewards credit cards" and you'll find a plethora of options. Plethora... that's such a fun word that so rarely gets used. Anyways, here is some actionable advice on taking maximum advantage of rewards cards.
First and Foremost - Payoff every card, every month, and never be late.
Don’t be afraid to have multiple cards, optimizing the rewards benefits of each.
If you’re planning on traveling, get a good travel rewards card.
There are very similar deals out there right now. If you’re getting ready to travel, get a new rewards card. Even if you currently have one, I’d still open a new one for the bonus points, and consider closing the old one. I’ve done it and as I stated above, it’s had negligible impact on my credit score, which never dropped below 775. Just don’t do it every month, and keep an eye on your financial situation. Don’t leave yourself in a bind by cancelling an existing card and not being able to open a new card because of credit issues.
Consider getting a name brand gas card.
Know if there is an expiration policy and the value of the points.
Use all of the perks available.
Credit cards are also great at showing you a breakdown of your purchases in various categories (restaurants, gas, general merchandise, etc). It’s very easy to maintain a budget, and more importantly know in which categories you’re overspending.
Most credit cards have a rewards section on their website where they’ve teamed up with various retailers to provide discounts. See who yours contracts with, and use them to your advantage.