Product Review: Capital One No Hassle Rewards

First, a warning. ONLY do this if you have the cash on hand to pay off your credit card balance at the end of each month. Otherwise, you will be paying interest, which defeats the point.

Ready? Make sure you have a credit card that pays cash rewards, such as a Capital One No Hassle Rewards cards. (No, I don't work for the company!) Search online to find the best rewards program for you. I like the No Hassle Rewards cards because you can claim the reward $ at any time; you don't have to let it build to a certain amount or wait until the end of the year before you can get your money. Also, you start earning rewards right away. My old credit card required that I spend $5000 before I qualified for a reward, and it changed the reward from 1% to .5%. That is not a good deal.

Next, use your credit card for every single purchase or bill from vendors that will accept credit cards. Your oil bill. Your cable bill. Your electricity bill. Your groceries. A gallon of milk from the corner store. A Happy Meal. As long as the vendor takes credit cards, no purchase is too small. (Again, just keep tabs on the amount you spend and make certain you will have the cash to pay off the credit card in its entirety at the end of each month. You do NOT want a balance from month to month.)

If the credit card pays you 1% back, and your bills total $2000 a month, you qualify for $20 in cash each month. That's $240 a year, just for using the credit card.

In these times, I appreciate all the easy cash I can get. Happy saving!

By Natasha from Exeter, NH

By NatashaLee

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By 04/06/2009

A warning about paying off the entire balance each month. Due to the recession, credit card companies are now closing many accounts with zero balances, to help reduce their maintenance costs and also to limit future losses. You will get no warning.....just a letter telling you that you can no longer use the card. Closing a credit card account (whether it's your idea or not), can hurt your credit score. If you only have one card, ANY card, and wish to keep it for emergencies, it is advised to always keep a small balance on the account.

Good luck to all.

By 03/31/2009

We've been doing this for years. We've been paying everything we can with a rewards card, and paying the balance in full every month. Actually, we have a few rewards cards. They have a limit on how much you can get back, so once we've gotten all we can from one, we put it away and move on to the next.

If we didn't have enough cash and discipline, we could get in trouble. But like I said, we've been doing it for years with no problems.

By 03/27/2009

The idea is that if you're writing checks to pay all the bills, you're simply changing who you write the check to and you're only writing one check. I think people get into trouble when they don't "set aside" that money. Perhaps each time a bill is paid with the credit card, that exact amount should be deducted from the checkbook. That approach might work for some people who are only a little challenged with self-control.

By 03/27/2009

Thank you, Natasha, for beginning this with a warning.

I understand what you are suggesting, and it will work fine for those few that during this financially hard time can still afford to and will discipline themselves to pay off their credit card each month. But what scares me about this advice is that 9.5 out of 10 people that try this (though they have the best of intentions) will not be able to pay off their credit card at the end of the month. Now they're even more in over their heads than before.

Please,please be honest with yourself and figure out whether or not this is a good idea that you can really do before you try this. If not, as Natasha points out, you are defeating your purpose; not only that you are digging yourself an even deeper hole with more debt.

We all think we can outsmart the credit card companies and take advantage of their offers with no damage to ourselves, but that thought is what they are "banking on".