How to Make Extra Money with the Best Reward Credit Cards for 2012

by Chris Tecmire

Credit Card


Philosophically, I despise credit cards.  I’m anti-debt all the way and will tell anyone who wants to listen to my babblings about the incredible feeling that comes with paying off that last credit card balance.

Theoretically, credit cards are a very convenient tool that, if used responsibly, can be helpful in the world of online purchases and ATM fees.  They also have the power to help or hurt your credit score more than any other type of debt.

Practically, the right credit cards can actually make you money.  But, I’ll say it again…ONLY if used responsibly.


So, my message today is simple.  If you have a credit card problem – stay away.  If you’re not able to pay your balance in full each month – stay away.

Don’t search for an extra $100 if you’re already spending much, much more than that in interest payments.  Focus all of your energy on paying them off.  Find the fat in your budget and pay them off as soon as possible.

However, if you have proven that you have the will power to pay off your balance each and every month, reward credit cards can be a great tool to make some extra money.  You could find one that offers long-term benefits and stick with it or use that card for awhile in order to reap the initial reward, and then cancel and move onto the next offer.  I’m in the process of doing the latter, but am aware that doing this for too long will negatively affect my credit score.  So, my next card will most likely be a better long-term option that offers good cash back options with a minimal annual fee.

My #1 rule with credit cards is that the balance MUST be paid in full each month.  Therefore, each and every credit card purchase needs to have the appropriate amount of cash waiting to pay it off at home or in our bank account.  Credit cards and cash purchases should not be viewed any differently.  The only reason I use certain credit cards instead of paying cash all the time is because the credit card companies will reward me for doing so.  As long as I avoid paying interest by paying it off each month, that’s a pretty good deal…and awfully sweet of them :)


How to find the best credit card offers


You could search Google for hours trying to determine the best offers or you could go to one website devoted to sorting it all out for you.  The website that I use to find the best deals is  It is super easy to find a credit card matched to your specific needs.  For example, you can search based on what type of card you’d like (low interest, balance transfer, reward, etc), what type of reward you’d prefer, and even what type of credit you have.  Once you’ve found the card you want, simply hit the “apply” button and you’re up and running.  It couldn’t be easier.

* I don’t always agree with their “top pick,” but they summarize the benefits of each of the top cards, so that I can pick for myself.


3 of the best reward credit cards for 2012


(excellent credit will be necessary for these offers)


1.  Chase Sapphire Preferred (Visa)

This is the card that’s currently sitting in my wallet.  In my humble opinion, it’s the best short-term benefit card out there right now, but it’s not bad as a long-term card either.

Here are the details:

  • Receive 40,000 points after spending $3,000 in the first 3 months.  This translates to $500 in travel or $400 in cash!
  • No annual fee for the 1st year.  $95 after that.
  • 2 points per dollar spent on travel and 1 point for all other purchases.
  • Receive a 7% annual dividend on all points accumulated during the year – even the ones you’ve already redeemed.

I just got the card in the mail a few weeks ago, so we haven’t received our bonus points yet, but we just make sure that we put all of our expenses on the card in order to make sure we reach the $3,000 goal.  Normally, $3,000 would actually be a bit much for us, but I have to reshingle a portion of my roof this summer, so I’m not worried about it.  The $400 – $500 reward is the best I’ve seen.


2.  Capital One Cash Rewards (Mastercard)

You’ve probably seen these commercials a billion times (Jimmy Fallon, and baby, and a bunch of Cheerios).  I personally haven’t used this one yet, but it offers some pretty good cash rewards.

Here are the details:

  • $100 cash bonus after only spending $500 in the first 3 months
  • 1% cash back on all purchases as well as a 50% bonus on all cash back (in other words, it works out to 1.5% cash back on all purchases)
  • Offer 0% APR for a limited time
  • No annual fee

It appears to be a good option due to the $100 cash reward as well as a higher than normal 1.5% cash back on all purchases.  Most reward cards offer 1% on most purchases with a higher percentage on select categories.  This card doesn’t worry about categories and, instead, just gives 1.5% across the board.  The lack of an annual fee is nice as well.

I could see this being a good long-term credit card for my family.


3.  Blue Cash Everyday (American Express)

I’ve used this credit card for the last 6 months or so and just recently pushed it aside for the Chase Sapphire Preferred card shown above.  During that time I ended up with a total of $150 in cash rewards, so I’m happy with my experience.

Here are the details:

  • Earn $100 cash back after spending $1000 in the first 3 months
  • Get 3% cash back at supermarkets, 2% at gas stations and department stores, and 1% on everything else.
  • Offer 0% for a limited time
  • No annual fee

The fact that it offers 3% cash back at supermarkets could be quite profitable for you depending on your buying habits.  However, for us it didn’t matter much for us because we do much of our grocery shopping at Wal-Mart and they don’t seem to consider that a grocery store.  Therefore, we only received 1% on those purchases.  That’s why something like the Capital One card and its 1.5% across the board sounds better to me than it might to others.

If you shop at a supermarket that is seen as strictly a grocery store, the 3% may work well for you.  Or you could apply for its big brother, the Blue Cash Preferred Card, which steps up the percentages a bit to offset a $75 annual fee.  Grocery store purchases will net you a 6% return and gas stations are bumped to 3%!  Depending on how much you spend, the grocery improvement may very well cover the $75 annual fee and then some.


What about a reward credit card for people with average credit?

Obviously, there are less options for those who have credit scores in the 620 – 660 range.  Even the high 600′s don’t guarantee that you’ll be accepted for one of the best credit cards.

There are still plenty of credit cards at your disposal, but the reward cards all but dry up.  However, there’s one that jumps out of the pack and still offers some cash back possibilites.


Capital One Cash Rewards (Mastercard)

Yes, it’s the same company and the same sort of card as #2 above.  This is the “average credit” version of the previous Capital One card.

Here are the details:

  • No initial cash bonus
  • 1% cash back on all purchases as well as the 50% bonus (1.5% cash back on all purchases)
  • 0% APR for a limited time
  • $39 annual fee

So, the difference is that the $100 bonus is gone and there’s now a $39 annual fee, but the 1.5% cash back remains.  With a little math you can determine whether it’s worth it for you.  I’m guessing it is since to recover the annual fee you would only have to spend $2,600 throughout the year.  If you were to charge $10,000 this year to your credit card (and pay it off each month of course) you could receive $150 cash back.  Even after the annual fee, that’s still over $100 more than you had before.


Now What?

Head over to to find the best reward credit cards for 2012.  Apply to one of the credit cards above or find one that suits you better and apply.

Once you receive your card you may have a spending goal that you need to reach in order to get the reward.  Make sure the goal is within your normal spending habits to begin with or don’t apply for the card.  It doesn’t make much fiscal sense to spend $1000 more than you normally would in order to get a $100 bonus.  If you’re not sure how much you usually spend on credit card-applicable purchases each month, check your expense tracking spreadsheet to find out.


Tip for making sure you don’t get behind on your credit cards:

Record each credit card purchase on a simple excel spreadsheet (or a piece of paper), so that you can keep a running total of what your bill is going to look like.  That way you don’t receive a $1700 bill next month and realize you only have $1200 in your checking account.  Keep track as you go.  A credit card purchase should always be backed up by the appropriate amount of cash at home or in your bank account.


What credit cards do you use for their rewards?  What kind of experiences have your had?  Comment below.

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{ 8 comments… read them below or add one }

Andrea August 3, 2012 at 9:50 am

We have a Chase Amazon card which I really like. There are no fees as long as you pay it off each month and you get points for every purchase and I think 3x more for amazon purchases. I can use the points when I buy things off amazon, which I tend to do anyway (Christmas gifts, baby items etc.). If you use amazon often I think it’s a good card. And the points show up on your account so you can use them whenever and you can choose how much to use, whether it’s $5 towards a purchase or $50 to pay for an entire purchase, etc. :)


Chris Tecmire August 5, 2012 at 6:21 pm

Thanks for the suggestion Andrea! We may have to look into that.


Chris August 7, 2012 at 2:56 pm

Is it ethical to cancel a card before the first annual fee comes due, such as the first one? thanks.


Chris Tecmire August 7, 2012 at 5:47 pm

I think so. All of the credit cards that I’ve used waive the annual fee for the first year, so I would have to stick around for several years to pay an annual fee. I’m not able to “skip out” on any fees – they waive it for me.
Thanks for the question Chris.


Laura @ Unpunctuated Life August 7, 2012 at 3:34 pm

Thanks so much for this thoughtful post! My husband and I use credit cards with great success, and I often tire of reading post after post about how cash only is the way to go. We have several cards that we use for different purposes, and we do adhere to the higher percentage categories.

We have an American Express through our bank, USAA, which got us a great deal on a rental car and which often has check-in deals tied top Four Square (which my husband uses anyway) where we can get $5 statement credits at various places!

We have a Discover card that we use for 3% cashback on rotating categories every 3 months, and a Chase Visa that gets 1% cashback on everything and 3% on special categories. The Discover is also great for online shopping because many retailers offer up to 10%+ cashback through

It can get a little complicated remembering all the categories, but my husband has a good head for that and we keep a Google Document to keep track. And, for the small amount of headache it takes to get it right, we often earn several hundred dollars back each year!


Chris Tecmire August 7, 2012 at 5:50 pm

Exactly. As long as you can keep track of your expenses and use the benefits to your advantage without getting into debt, they’re a great tool. Thanks for the comment Laura.


joyce August 12, 2012 at 10:13 pm

what does it do to your credit score, if anything, applying for new cards and closing out accounts every year or so, trying to avoid annual fees? we finally applied for a costco/american express a few months ago, which will give us cash back for purchases. until then we have only had a mastercard with no annual fee and less than 8% interest rate (but we always pay it off in full each month). we now use our mastercard only where we can’t use amex.


Chris Tecmire August 13, 2012 at 7:00 am

From the sounds of it – what you’ve done so far won’t hurt your score at all since you kept the old one open and simply began using a better cash back card most of the time.
However, if you’re opening a card, using it for 6 months or so for the initial cash reward, applying for a new one, and then closing the original over and over again to avoid fees it could hurt your score a bit. Consistently applying for credit (too many inquiries) and then closing them out (lowering your overall credit limit and your credit utilization ratio) is what dings your score slightly. However, unless you play that game consistently, you have nothing to worry about. And even if you did, it isn’t likely to lower a decent score into the poor range – we’re only talking about a marginal drop.
What credit bureaus like to see is this: sufficient credit limits available, with low balances, and a long history with those particular cards. Anything else won’t be ideal, but won’t slam your credit either as long as you pay your bills on time. THAT’S the only thing that can take your score from good to poor quickly.
I hope that makes sense. Let me know if it doesn’t. Thanks for the question Joyce.


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