Use reward cards that suit your lifestyle, experts say.

Use reward cards that suit your lifestyle, experts say. Credit: Getty Images / iStockphoto / mphillips007

People love rewards credit cards.

It’s not hard to understand why. Issuers are tripping over themselves to get the business.

According to research in a report by MagnifyMoney, “From 100,000-point sign-on bonuses to 6 percent cash back offers, it has never been a better time to be a credit card customer.”

But there are two sides to the credit card. When does your rewards credit card begin to pay for itself?

That’s the question tackled in a new report by RewardExpert, a free service that helps travelers maximize airline miles and credit card points. If you spend less than $2,000 a month, you probably won’t start netting rewards from most luxury credit cards for a significant portion of the year.

“Rewards cards with no annual fee pay off right away. As long as you pay your balance in full every month, you’ll avoid interest and late fees, and any rewards or cash back you’re earning will put you ahead,” says John Ganotis, founder,

  • Be mindful of fees

“Take the Capital One QuicksilverOne Cash Rewards Credit Card. It has a $39 annual fee and provides 1.5 percent cash back on all purchases. Since $39 divided by 0.015 is $2,600, you need to spend at least $2,600 per year (or an average of about $220 per month) on the card to break even. Then you’ll come out ahead on any additional cash back,” Ganotis says.

  • Prioritize specific perks

“Cards can have hefty annual fees, from $95 to $550. Take advantage of the perks and spend enough to outweigh the cost of ownership,” explains Alex Cohen, founder of Birch, a San Francisco company that helps consumers maximize credit card rewards.

  • Do your research

Find cards that suit your lifestyle and habit. If you’re a foodie who likes to travel, get a card that rewards spending in those areas.

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