Your Money, Your Future
Your Money, Your Future

How to snag the best credit-card perks

Making the most of credit card perks

You've seen the commercials. You've gotten the junk mail.

Offers for "fly anytime," "double cash back" and "no annual fee" credit cards are everywhere. So how do you pick the best piece of plastic for you?

Here are some basic tips to follow.

Don't carry a balance

"If you're carrying a balance, forget about the rewards," says Kenneth Lin, CEO and founder of Credit Karma, a website that tracks credit products.

Remember, that enticing offer is there to get you to spend money. But unless you plan on paying off what you charge each month, you're canceling out the rewards.

Lin says that's because highly promotional cards tend to also have higher interest rates.

Ignore the interest rates

Now that you vow to never carry a balance, ignore the interest rate when comparison shopping cards.

"Just shoot for the best rewards and know you have to pay that balance," Lin said.

Are you a points or cash-back person?

When it comes to rewards programs, the two most common are cash back or points. Depending on your goals, one may be better than the other.

"Points are best used when they are travel related," said Lin. "They are best used for getting lower-cost airfare or hotel rooms."

In other words, don't trade your points for a blender or gift cards. If that's what you're after, Lin recommends going with a cash-back card, where you can get as much as 5 percent back on your purchases.