Published in: Credit Cards | Jan. 15, 2019

How to Develop a Winning Credit Card Strategy to Maximize Rewards

By:  Lyle Daly

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If you want to earn as much back from your credit cards as possible, then you need a game plan. Here’s how to figure out yours.

Image source: Getty Images.

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Image source: Getty Images

Are you maxing out your credit card rewards every month?

For most consumers, the answer is no. There are so many different cards available and so many ways to earn points that it can be tough to keep track of them all.

Here’s the good news -- if you’re willing to put a little time in upfront, you can build a strategy that will help you accumulate more rewards on a regular basis.

Before you begin

Although you can get started earning credit card rewards at any time, I’d recommend holding off if you currently have any credit card debt. If you get any additional credit cards and you’re not careful, you could end up with more to pay off.

It also helps if you have a high credit score, because you’ll have an easier time qualifying for the best credit cards.

Choose what you want to earn

The first decision you need to make is which type of rewards you want to earn -- cash back or travel rewards.

You can’t go wrong with either, so the one you choose will depend on personal preference. Here’s a quick idea of the advantages with each type of rewards.

Cash back:

  • It’s easier to use, because all you do is redeem the cash back you’ve earned.
  • Most cash-back credit cards don’t have an annual fee.

Travel rewards:

  • You can get an excellent value when redeeming your points for travel.
  • Travel rewards cards typically include travel perks.

Pick a card that fits your spending habits

Once you’ve figured out the type of rewards card you want, you can check out the most popular cash-back cards or the best travel rewards cards to see what your options are. The most important features to look at are:

  • Rewards rates -- Check how much you’ll earn in whichever areas you usually spend the most money. Keep in mind that unless you have particularly high spending in a certain category, you may earn the most if you go with a card earning a flat 1.5% or 2% back.
  • Annual fees -- When comparing cards with and without annual fees, make sure to calculate how much more you’d have to spend for the cards with annual fees to be worth the extra cost.
  • Sign-up bonuses -- Although a big sign-up bonus is always nice, you’ll need to hit the spending minimum to take advantage.

With a little knowledge of your normal spending habits, you’ll be able to calculate the cards that will earn you the most back.

Consider adding more cards to boost your rewards

If you don’t want to make your life too complicated, you can stick with the one credit card that you chose earlier. Or, you can add more cards to the mix. Each card you add to your wallet is an opportunity to earn another sign-up bonus and accumulate more bonus rewards in certain spending categories.

What’s important here is selecting cards that complement each other. You wouldn’t want to waste your time getting multiple cards with similar bonus categories. Try to avoid getting more than one card with an annual fee -- those fees will start to cut into your rewards profits, and there are plenty of great no-annual-fee cards to choose from.

Reviewing your monthly expenses is a quick way to see where you’re spending the most money and pick a card that will earn you more back there. For example, let’s say that you started off with a flat-rate card earning 1.5% back. You see that two of your biggest expenses are groceries and going out. So, you get a card that earns 3% back at grocery stores, and another that earns 3% back on dining and entertainment.

Stay up to date

Last but not least, take a look at the latest credit card offers periodically. You never know when a new card will come out or an old one will get a facelift. Even when you’re happy with your current roster of credit cards, there’s nothing wrong with upgrading when something better comes along.

Our #1 cash back pick has a surprise bonus

This may be the perfect cash back card! That's because it packs in $1,148 of value. Cardholders can earn up to 5% cash back, double rewards in the first year, and avoid interest well into 2020. With such a deep bench of perks you'll wonder how this card packs in a $0 annual fee. Best yet, you can apply and get a decision in two minutes. Learn more with our in-depth review.

Find the right card for you

Cash Back & Rewards