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Question #2: How am I going to pay for it?

Right now is the best time in years to shop for a rewards card, with banks competing for customers and offering amazing sign-up bonuses and perks. But if you don't pay your balance on time each month, you could wind up spending more on interest than you get in rewards. So, before you make a big purchase, Danielle Fagre Arlowe, senior vice president of American Financial Services Association, recommends sitting down to determine whether you would plan to pay the card off in full before the statement period ends. If you would be able to pay off the whole thing at once, use the cash-back or miles card; if you're going to pay off the balance in increments, put down the card with the lowest APR (rewards cards usually have higher APRs).