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6 ways to spoil your cash-back rewards

Keeping a balance
Keeping a balance © Stephanie Frey/

A rolling balance is a cash-back card's worst enemy. At some point, you'll end up financing your own rewards program through interest charges. Here's how.

Say you charged $500 on your cash-back credit card that earns 1 percent back on everything and carries a 16 percent annual percentage rate. But you only paid off $100 of that balance. Congratulations, you just paid $5.33 in interest for $5 in cash back. The hole gets deeper if you roll over the balance again and again.

"That is the fastest way to chew away the rewards you're earning," says John Ulzheimer, president of consumer education at

And if you have to hold off charging this month to pay off last month's charges, then you're not earning any more rewards. The only way to get every cent you earn through rewards is to pay off your balance entirely every month.


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