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Today Show: Best Rewards Credit Card

The Today Show: Credit Card 101

How do you pick the best rewards credit card?

When it comes to choosing a credit card, most people can benefit from choosing a rewards credit card. But to truly pick the best rewards credit card for you, you need to assess your spending. If most of your monthly spending is on basics, like groceries and transportation, then a cash back rewards card will be your best bet. If you’re a regular traveler, it’s probably worth it to get a travel rewards credit card. Look for one that is affiliated with the airline you use most, or a great general card with flexible points.

Once you choose a rewards credit card, make sure you don’t do anything to jeopardize your points. Always make your payments on time, and be careful not to accidentally break the card agreement. Doing so can potentially cause you to lose your hard earned points. Make sure to keep your card active by using it (even if it’s just for a small purchase) from time to time. And always use your rewards points before you consider closing a card.

Another thing to note: although 0% balance transfer cards seem like a good deal, they are almost never the best rewards credit card option. If you’re carrying a balance, don’t open any new cards until you’ve paid off your debt. I highly recommend using a calculator, like the debt planner calculator from CNNMoney, to come up with a plan you can stick to. Balance transfer cards generally charge a transaction fee for the transfer, and the 0% rate is only introductory. In the long run, you usually end up paying more by opening a balance transfer.

If you need help choosing the right card for you, check out NerdWallet.com. They have a helpful tool that will provide recommendations for the best rewards credit card for your lifestyle. Try to choose one credit card and use it for the majority of your spending. That way you’ll rack up as many points as possible. And of course, don’t forget to actually cash in those points. The rewards programs can change at any time, so it’s better to use them regularly than save them indefinitely.