4 Tips for Maximizing Your Credit Cards in the New Year

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Now that a new year is underway, it’s time to figure out how you can make the most of your finances. This includes looking spending habits and trying to figure out what you can do to maximize your credit card usage this year.

If you plan to get your finances in order, and make the most of every dollar you spend, here are 4 tips that can help you maximize your credit card use:

1. Get a Rewards Credit Card that You’ll Use

Look in your wallet. What rewards credit cards do you have? Identify the most useful cards in terms of rewards. Do you travel a lot? Do you have a card that offers a generous amount of points? Or do you prefer cash back.

Know which cards make sense for you, and if you don’t have a solid rewards card to use, apply for one that you can take advantage of.

2. Pay Attention to Bonus Points and Extra Cash Back

Now you need to figure out how you can get bonus points and extra cash back. Credit cards that offer rotating cash back categories usually list them at the beginning of the year. You can look ahead to see which quarters will offer bonuses on certain categories.

Check your tiered rewards programs for things like extra points and cash back on categories like grocery, gas, and utilities. You’ll want to coordinate the use of your rewards cards so that you are always getting the best possible rewards any time you make a purchase.

3. Use Your Credit Card for All Your Purchases

If you want to rack up the points and/or cash back quickly, you need to use your credit card for all of your purchases. Instead of using your debit card, use your credit card. Have your automatic payments, when possible, switched to credit cards that offer you the best points and cash back.

You don’t want to overspend, though. Make sure that you stick to your budget, only buying things you would normally purchase in a month.

4. Pay Off Your Credit Card Balance Every Month

Since you are using your rewards credit cards for your regular purchases, you should have no trouble paying off the balance each month. Simply take the money that has been sitting in your bank account, and pay it off. If you want an extra boost, you can keep most of your money in a high-yield savings or money market account and then pay your credit card bill from there. You’ll earn a little extra interest on top of getting your cash back and rewards points.

Make sure you pay off your cards each month, though, or you will pay a high interest rate that will overcome your rewards.

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