Finance

Credit: Playing Your Credit Cards Right

Bad news for anyone who likes a freebie.

Credit-card companies are cutting back on their rewards. In the last month, Citibank and American Express have ended the 5 percent and double-cash-back rebates offered for cardholders who frequent grocery stores and gas stations.

The latest reward schemes are more complicated, less generous and require some planning.

In other words, more often than not, you should use different cards for different purchases.

Here’s how to cash in. For starters, know the rebate limit on each of your cards. Most of them max out at about $300 a year. Once you’ve hit that number, move the plastic to the back of your wallet and find another card. Before you fill out new applications, though, a few caveats. Be ready to review your cards and switch them every year if they’re not working. Cancel any card you’re not using. And, if you’re carrying any balances, don’t think about rebates. Just move your balance to the best zero-percent-interest offer you can find. For more information about a card, check cardratings.com or indexcreditcards.com, or Google the card name. Issuers don’t always put their best card offers on their own Web sites.

Rebate cards for cash lovers: Money is still easier to spend than points or miles; these cards help you maximize cash rebates.

American Express Blue Cash. If you’re a big spender who likes to keep things simple, this card can work for you, says Curtis Arnold of cardratings.com, who cashed in more than $900 in rebates himself last year. You’ll earn 1 percent back at grocery stores, drugstores and gas stations, and 0.5 percent back on most purchases until you’ve charged $6,500. After that, it’s 5 percent on those everyday categories and 1.5 percent on everything else. Load all of your expenses on this card; there’s no rebate cap.

HSBC Direct Rewards MasterCard. This card is still paying 5 percent rebates at gas pumps, groceries, and drugstores, though it may get scaled back in the near future.

Chase PerfectCard Visa. Not bad if you use it just as a gas card. It rebates 6 percent on gas for the first 90 days, and then 3 percent thereafter, and credits your account with those rebates monthly.

Chase Home Improvement Rewards Visa. If you spend weekends painting, hammering and mowing, try this card. You get 3 percent back, up to $300 a year, for all of your hardware purchases.

Citi Dividend MasterCard. Sadly, this card is chopping its 5 percent rebate on everyday purchases to 2 percent, but it’s adding utilities and convenience stores to the list. You can set this card to automatically pay your phone, cable and water bill, and save a little off of each.

Costco/American Express True Earnings Card. Free for Costco members, this card offers 3 percent rebates on meals out, 2 percent rebates on travel expenses and 1 percent on everything else. There’s no cap on rebates.

Cards for travelers: Those reward miles can get complicated, especially when you try to trade them in for an actual ticket. But real road warriors might find one of these cards useful.

Citi PremierPass MasterCard.
Earn one point for every dollar you spend, and one point for every three miles you fly. You can spend the points on airline tickets and booty.

Capital One No Hassle Miles Rewards. This card offers an above-average 1.25 miles per dollar spent that can be used on any airline, but there’s another reason to like it. Capital One is one of the very few issuers that won’t tack on any fees for purchases made in foreign currencies. Even if you don’t use it to buy your ticket, use it once you get there.

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