Americans are carrying nearly 650 billion dollars in debt on their credit cards. That means there's a lot of money to be made off credit card interest. That's why companies are working so hard to get you as a customer.
Consumer Reports has learned many are sweetening their reward card deals to lure new customers. But finding a card that's truly "rewarding"
We charged 90 billion dollars worth of purchases over the holidays – that according to Cardweb.com. Plenty of us got reward points which you can redeem for just about anything these days.
"I get to fly free with a lot of the points I collect."
"We cashed in for a mattress not too long ago.”
"If I'm gonna spend money you might as well get something in return."
But, be aware, the reward card you have may not be as generous as many new cards. That's what the Consumer Reports Money Adviser has just learned. Deputy Editor Lisa Freeman checked out a bunch of offers.
Her first bit of advice — for a reward card to be truly rewarding, you don’t want to carry a balance.
"The reason is these cards don't offer the lowest interest rates and if you're overpaying on interest that could quickly wipe out any of the benefits of getting rewards."
Your next move, check out offers closely so you’ll get a card with rewards you’ll actually use.
Air travel is a favorite reward for many people.
"With air miles you want to rack 'em up and cash 'em out fast because airlines are infamous for changing redemption rules."
Consumer Reports found several worthwhile reward cards, including the GM Master Card. It gives you 5 percent on all your purchases which you can put toward a General Motors car or truck.
The Chase Perfect Card is another good reward card. It'll give you a rebate on all your gas purchases.
“But no card is a good deal if you overspend in order to get rewards. And some cards actually encourage you to carry a balance by offering freebies. Don’t fall into that trap.”
And, one more way to get the most from a reward card, use it for routine purchases. That way you’ll tally up reward points even faster.
Consumer Reports says not only are many of today's reward cards more generous — they're also more flexible when it comes to redeeming points. For instance, Master Card is allowing families to pool their points. And Discover Card is letting cardholders redeem points more frequently than once a year.