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HOW TO MAKE A BUNDLE WITH CREDIT CARDS

You don’t need to be “The Points Guy” to make hundreds even thousands of dollars a year with credit card rewards programs. But you do need to be a person who pays off his or her credit card balance every month.

If you are not paying off your balance every month, rewards should not be your thing. You should be looking for the lowest-rate card you can find until you pay off that debt,” said Bill Hardekopf, president of LowCards.com. “But if you pay your balance in full every month, you have a wealth of choices that can be surprisingly lucrative.”

In an effort to win wallet-share in an increasingly competitive market, credit card companies are providing some of the best deals in history to those willing to spend on the right rewards card. These days, offers range from bonuses worth as much as $600 in cash to deals that provide free museum visits and access to concerts just for cardholders.

However, as quickly becomes obvious to anyone looking for the best rewards cards, the value of the deal is in the eye of the beholder. Sites such as LowCards.com, WalletHub and CreditCards.com all rank rewards cards, but few of these rankings deliver the same cards.

There’s a good reason for that, said Odysseas Papadimitriou, CEO of WalletHub. Many programs have “tiered” rewards that give more credit for specific types of spending.

For instance, the Costco Anywhere Visa gives 4 percent back on gasoline purchases, 3 percent on restaurants and travel, 2 percent on purchases at Costco and just 1 percent on everything else. Thus, it’s a great card for those who spend the bulk of their money on gasoline, travel and restaurants, but it’s an also-ran choice for those who do most of their spending at grocery stores and retailers.

If you spend mainly at retailers and grocers, the Capital One Venture card, which provides two points per $1 purchase, or the American Express Blue Cash Preferred card, which pays 6 percent rewards on grocery purchases of up to $6,000 annually, might be better, according to NerdWallet, which also provides credit card comparisons.

Is travel your thing? Consider the Chase Sapphire Preferred Card, which provides a bonus worth $625 in travel rewards in the first year. After that, you get 2 points per $1 in dining and travel purchases. And the card doesn’t charge any foreign transaction fees. One word of warning: After the first year, Sapphire charges a hefty $95 annual fee, so make sure to evaluate annually whether you’re getting enough from this card to keep it.

Another option is the Barclaycard Arrival Plus Mastercard, which provides a bonus worth $500 if you spend $3,000 in first 90 days, plus 2 points per $1 purchase. It, too, has an annual fee after the first year.

If you’re incredibly organized and don’t mind keeping track of “rotating” bonuses that pay more when you spend at the right time in the right way, both Discover and Chase Freedom cards offer generous payouts.

Confused about how to pick the perfect rewards card for you? Hardekopf suggested you do two things: First decide on the type of reward you want, airline miles, perks or cash — then narrow your choices to a few cards that give you the type of reward you want.

Next, sit down with a notebook and last year’s annual credit card summary and do a little math. Most credit card companies offer an annual report that details your spending and divvies it up into categories. Using these reports, you can calculate the rewards you’re likely to earn on any given card, assuming that your spending is relatively consistent with last year’s.

If that’s more work than you want to do, just pick a good cash-back card, such as the Capital One Quicksilver or Citi Double Cash card, which both provide simple formulas, better-than-average paybacks and no annual fees, said Hardekopf.

But whatever you do, be sure to use your rewards, said Robin Saks Frankel, credit card analyst with Bankrate.com. A just-released Bankrate survey found that roughly three in every 10 cardholders never cash in their points. And there’s no point in that.

Credit card rewards don’t usually gain value over time,” said Frankel. “In fact, they’re more likely to lose value as companies require more points or miles for the same perks. Your best move is to cash them in regularly.”

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