Consumer Reports: Cashing in on cash back credit cards

PHILADELPHIA (WPVI) -- If you're still using the same old credit cards, it may be time to make a switch.

Cards that offer cash back have changed in recent years but many people aren't reaping the benefits.

According to a survey last year, 20 million consumers have never changed their preferred credit card, and that could mean they're losing out on earning some real money.

When it comes to plastic, Americans don't seem to bend from their established routine. In fact, 25 million have held onto their favorite card for at least a decade.

Loyalty has some of its own rewards, but cash back may not be one of them. And about half of all credit cards that offer rewards now offer cash back as an option. That's up from only around 25 percent in 2013.

"While you're typically looking at 1 or 2 percent back, some cards can go as high as 6 percent cash back on certain purchases. And the consumer usually gets to choose how they want to redeem their reward," said Margot Gilman, Consumer Reports Money Editor.

Already using a cash back card? Why not double your effort? Since different cards offer higher rewards for purchases in certain categories, Consumer Reports found using two cards strategically can really boost the benefit, earning you as much as 40 percent more cash back.

"So here's one strategy. You can use a Blue Cash Preferred Card to get 6 percent on groceries and 3 percent on gas. Everything else can be charged on a Citi Double Cash Card and get 2 percent cash back on all other purchases," said Gilman.

So how do you know which cards will work best for your wallet? Consumer Reports has a tool on its website. They also provide a list of the best cash-back credit cards.

"First you plug in how much you spend each year in a number of categories. The tool then compares 66 different cashback cards to estimate which will get you the most money back after one year and three years," said Gilman.

And remember, cash back programs only count if you pay your balance in full. Otherwise you'll likely rack up more in interest charges than you'll earn in rewards.

ONLINE:

Consumer Reports' Credit Card Comparison Tool

Consumer Reports: How to cash in on cash back credit cards

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