Using credit to make your monthly expenses is a recipe for disaster.
But if you use them responsibly, you can make credit cards work for you.
Banks want your business, so they are sweetening the deal, by offering reward programs that pay you to use the credit card.
"In theory you can get something for almost nothing," says industry expert Nicholas Clements.
Clements is the founder of credit card comparison website, Magnifymoney.com. He says rewards programs can be worth it if you follow one very important rule.
"Only spend what you can afford to pay in full on time every month," Clements says.
Otherwise you could end up spending more interest than you ever gain in rewards.
So what cards are best?
"At a minimum you should be earning 2 percent," he says. "If you spend a $1000 a month you're going to get $240 a year for doing nothing other than buying what you already were going to buy."
According to Magnifymoney.com cards like Citi Double Cash and Fidelity Visa offer that benefit
Already getting 2 percent back?
Clement says there are opportunities to get even more.
He says Discover It and Chase Freedom cards offer more money for certain transactions.
"Around the holidays they usually have Amazon or other holiday type spending so can get five percent (back)."
Some cards offer higher percentages of rewards on a rotating quarterly basis for specific things like, restaurants, gasoline, or particular stores. Clements says you typically have to inquire about what the extra incentive categories are for each quarter.
But, if miles are your thing he says you'll have to work for them.
Clements says getting them is easy, redeeming them can be a hassle, but in the end they are worth the trouble.
"If you plan in advance and you play close attention you can ultimately get really really good deals," he says. "
He says since airlines charge for everything from luggage to early boarding, those perks could save you money on more than the ticket.
"It could pay for itself in the value of the checked bag benefit, plus you get to board earlier and other lifestyle type benefits that shouldn't be discounted," he says.
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