Some cards offer 5 percent cash back in rotating categories that can correspond to the season in which people generally shop for those items. But you must opt in each time. And there’s a cap on how much you can earn in each category.
If you’re not a big spender, watch for terms that require you to spend a certain amount to get the advertised perks. Some cards pay 5 percent in those rotating categories, but offers only up to 1 percent on other purchases. And “up to” is the key here–if you spend less than $3,000 a year, you get only 0.25 percent cash back.
One Visa card pays a $150 bonus after you spend $500 in the first three months, but it has an annual cap of $300 on certain rebates. Another Visa pays 3 percent on gas, 2 percent on groceries, and 1 percent on everything else. After you spend more than $1,500 on gas and groceries in a quarter, your rewards on future purchases in those categories drop to 1 percent.
Check for expiration dates on rewards, especially with travel cards, because it often takes a long time to accumulate enough points for a ticket.
Some cards take away your month’s points if you miss a payment and might charge you a reinstatement fee of $25 or so to get the points back. Some cards take away all your points if you miss two straight payments. Setting up account alerts for payment due dates or arranging to have your bill automatically paid out of your checking account can help you avoid losing your rewards.