Save Money With Credit Cards (pt.2)

I enjoyed the subject so much the first time, that I just had to come back for more. No, actually I never really got to the point of the title on the first post, so I need to type some more. I'll start with a story.
I received a new credit card because my old one was approaching expiration, this meant I had to call and activate it before I could use it. Having decided not to get a landline phone (both of our families are out of state, and it's cheaper to call with cell phones), I had to hang on the line and talk to a person.
I don't mind talking to customer service, except for when I need service. Just activate my card and I'll be on my way thank you. The representative was real nice, but she tried to sell me payment protection insurance. Now, I pay my balance off every month because I don't put anything on the card I cannot pay. you - then why use a credit card fuzzy? why not just skip the evil middle man and pay cash?
me - hold on, and stop interrupting me, I'll get to it later.
Now, where was I? oh yes, the service representative. She was real nice, but like all representatives, was forced to read from a script.
me - I'm calling to activate my card.
s. r. - Ok, would you like to transfer any balances at x% interest. (not her actual words, but close enough).
me - no thank you, I don't really carry a balance on my cards.
s. r. - wow, well that's a great way to live.
me - umm, thanks... (I think, it's hard to take a compliment like this, I just never needed an "emergency" charged to a card, more on this latter)
s. r. (sometime later) - Can I interest you in a payment protector plan? it only costs x % per statement balance...
me - no thanks
s. r. - well, you already said you don't carry a balance, so it wouldn't cost you anything.
me - no...thank...you
This point in the conversation is what I want to highlight. It's fine for an employee to try to sell additional services when they get a chance, but I've read the fine print, and I know it'll cost me something. See, in my book, "carrying" a balance means not paying off the credit card in full when you get the bill. A payment protector plan charges you a percentage of your monthly balance, that is a percentage of what you have charged for the month, regardless of whether you end up paying that statement in full.
So here's my first principle for saving money with credit cards: Know the fine print.
I read about a faithful credit card customer who racked up vast amounts of airline miles on his credit card, only to find out that the airline had changed the rules and began reducing his miles when he hadn't taken a trip in 2 years. Now he had lost all his miles. This brings me to a second principle: Know how the fine print can change.
I strongly discourage you from getting any card with a yearly fee. I would rather get a much higher interest rate than a card with a fee because I don't plan on using it as a loan. Third and fourth principles: Skip cards with yearly fees, and don't use your card as a loan.
This last point is one of the main reasons I use credit cards over cash. Cash back from Discover (up to 5%) and Visa (1%). The discover card start the year by earning 0.25% on the first $1,500 charged, then it starts earning 0.50% on the next $1,500. After you've charged $3,000 in a year, it starts earning 1%. The best part are the cashback bonus specials discover runs. These are special rewards of 5% for specific categories, like gas or restaurants. You have to sign up for the cashback bonus when it comes out though, you don't get it automatically.
Get the type of card that gives cash back, and you could be enjoying discounts on any service or product you normally purchase. It all adds up, and gives a nice bonus every now and then. Fifth principle: Get cash back cards.
Of course, if you forget to pay your card one month, you have interest payments to deal with that will vastly outweigh any cash back, so pay the card off every month. Last, and most importantly, pay them off at the end of the month.