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Credit cards have a nasty stigma when it comes to spending money due to the high-interest rates they charge, but they can be an amazing financial tool IF you use them correctly.

I’ve had a credit card since I was 17 years old, and I have yet to pay any interest on my card. Instead I use the cards to get rewards and cashback on items.

If you learn how to use credit cards effectively, you can reap the rewards… literally.

Never Keep a Balance

Credit card companies make their money when people don’t pay their balance off each month. They charge exorbitant interest rates which quickly trap people in a difficult cycle of debt. Interest rates can be in the 20% range or higher. Use credit cards effectively to get a 0% interest on the purchases you make by paying them off each month.

I can’t stress it enough… ALWAYS pay off the cards each month, or all the money you gain in a year in rewards can be blown in just one month of interest.

Know Your Limits

People tend to spend more money when they use credit cards. You NEED to be aware of that and track everything. Record all of your expenses with an app or on pen and paper to make sure you can track your spending.

It’s extremely important to know your spending limits with credit cards. If you don’t have the money to spend or find yourself getting into a bad pattern of debt, avoid using credit cards. Cut them up. Throw them away. No rewards are worth the interest and fees you pay when you can’t pay them off each month.

Use Rebate Apps

There are many rebate apps you can use with your credit cards. Download Rautken and use your credit card for online purchases to get extra rewards. You can also load your credit card information to get cash back on select in-store purchases. When you sign up today through this link, you’ll get a $10 bonus as a welcome gift after you spend $25!

Dosh is another app you can use to load your credit card information and get cashback on purchases you make. This is on top of the rewards you get through your credit card companies.

Make Money with Cash Back

Instead of paying interest on cards, let the credit card companies pay you with cashback! There are many different types of cards that offer cashback… you just have to pick one that will give you the most for you. Below is a list of cards my family uses and a review of their Cash Back Programs.

Citi Double Cash Card

This is our “go-to” card. You get 1% back on purchases you make, and an additional 1% back when you pay off those purchases. At 2% cashback total, this is the card we use for daily purchases unless another card can provide us more rewards.

Amazon Rewards Visa Signature

With 5% cashback on all Amazon purchases, it’s a no-brainer! Anyone who knows me, knows I shop on Amazon frequently (and find amazing deals that I post on my Facebook page Saving with Susan). The Amazon Rewards card is great to earn cashback on purchases I am already making, and we even use the rewards money and apply it to the Prime membership each year. If you don’t have Amazon Prime you can try it for free for 30 days here. On top of all that, you can earn 5% back at Whole Foods, 2% back at restaurants, gas stations and drugstores, and 1% on all other purchases.

Discover Card

This was the first card I ever applied for, but with the varying 5% cashback categories, you just have to pay attention to the category and use your card accordingly. Having 5% can really add up in a 3-month time frame depending on your purchases. Another great benefit with Discover is the option to buy discounted gift cards with your reward money. You can get at least $5 added to your gift card purchases!

Whatever cards you choose, learn their cash back program and maximize your savings.

Be Smart

Again… the most important thing is to know your spending habits. If you can’t pay your cards off… get rid of them. Use them to your advantage, keep track and pay them off, and reap the rewards they offer!