Wednesday, March 14, 2012

Cash back cards – Avoid credit card debt and contribute to Roth IRA


Credit cards are fan easy way to make purchases and also get rewards. Many a times in order to get rewards such as cash back which are the most common, you tend to overuse your credit cards. At such times you are likely to mount up a high amount of credit card debt. In order to come out of such situations, you need to consider some credit card debt negotiation tips. Although when talking about credit card rewards the most common ones that come to your mind are cash back, airline miles and so on, however, there are some cards available in the market which enables you to earn rewards that you can use for investments including account of Roth IRA. There are specific cards available that offer you Roth IRA accounts. Some distinct advantages offered by these cards are:

  • These cards are affiliated to specific brokerage firms and as a result of this they try hard to maintain a good record by providing top class customer service. This is because there is more on the line than just your credit card account.
  • The percentage of rewards you will receive will be typically higher than the 1% available with standard credit cards.
  • This way of increasing contributions to your Roth IRA account is “pain free”.

However, if you don’t want to take on these cards there are alternate ways in which you can bolster your Roth IRA contribution. Instead of using some specific cards you can use any cash back credit cards to earn money and then deposit this amount to your Roth IRA account. You can maximize your earnings on credit cards in the following ways.

  1. Use a number of credit cards – There are a number of cash back credit cards which gives you up to 5% return on certain types of spending but 1% or less on the other types. These are usually the best ones. In order to maximize such cash backs you can use different credit cards to purchase the categories the give a higher cash back offer.
  2. Use credit card for work related expenses- There are options in which you can work out arrangements with your employer in order to get reimbursed for your work related expenses when you are using your own credit card instead of the company credit card. You have to submit the credit card statements or the receipts to your employer for reimbursement. This is beneficial for you as you get to keep the cash back on the particular spending.

Thus, if you're interested in assembling money that you can save in the Roth IRA account, you can certainly use the cash back credit cards in the ways mentioned above. However, don't misuse them or overuse them as accumulated credit card debt can ruin your financial future.

This is a guest post by Christina Jones, a financial content writer associated with Oak View Law Group. She has also been contributing to many personal finance blogs as a guest columnist since long.

No comments: