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There is one side that will argue that paying with cash is a much better way to spend. The other side will argue that it makes more sense to use plastic and reap the rewards. Both arguments are valid, but it really just depends on how responsible you are with credit cards. If you are irresponsible, you may want to avoid them, but if your can avoid spending too much with a credit card, you might want to take advantage of the free money they can bring.

Credit card companies offer you tons of great rewards, including cash-back, in order to entice you into using the card more, thus increase your potential debt and charging huge interest rates. To the detriment of many consumers, this often works. Do not let the credit card companies get the best of you. Beat them at their own game – Here's how.

First, you need to find the credit cards that offer the most cash-back rewards for different kinds of spending. For instance, if Citi Card offers 3% cash-back on the top three places you spend, American Express offers 3% cash-back on purchases of gasoline, and Discover Card offers 5% cash-back on all travel expenses, then only use the right cards for your specific expenses. Try to have only three cards – no more no less – and to aim for getting an average of 2% cash-back for all of your expenses.

Another creative way to earn the maximum amount of rewards with your credit card is to pay for your monthly bills with an auto-pay system. Bills such as your cell phone, cable, internet, home phone, utilities, insurance, and others can usually be set up with auto-pay on your credit card by contacting the service provider. In fact, you can often do this on the company website.

Last by not least, pay your monthly balance in full every month and on time. You may want to consider setting up auto-pay with your credit card bill as well to pull directly from your checking account every month so that you will never be late on a bill. Again, this is easy to do at your credit card company website.

To put the savings in perspective, if you are able to get 2% cash back on everything you spend and you spend $ 30,000 in one year, that's $ 600 in free cash. And the best part is, you were just changing the way you pay for the things you were already going to buy in the first place.

How to Maximize Your Rewards

How to Maximize Your Rewards