How I get the most out of my credit card rewards

My life hasn’t been the same since I got my first rewards credit card.

Now, all of my purchases have to reap cash back or points, and I won’t take anything less than 2 percent back. I don’t like booking travel if it’s not with points. If I’m going to spend, I want to know how much I can earn back.

What started with a single rewards credit card in 2020 has evolved into the strategy I use today. And I expect it will continue to grow and change, just like my life and the spending that comes with it. But for now at least, here’s the strategy I use to maximize my credit card rewards.

I tailor my cards to my spending

Here’s a really important first point: You can’t really maximize your credit card rewards if your cards don’t fit your spending. If you have a store card from a store you barely shop at or a cash back card with a grocery stores bonus category when you mostly eat out, it’ll be hard for you to earn rewards. It’s also important to make sure you aren’t spending just to earn rewards, as no points or rewards can compete with the burden of high-interest credit card debt you can’t pay off each month.

For that reason, before you apply for a credit card, know exactly what its place in your strategy will be, and how it will fit within your current and expected regular spending.

For example, my card rewards usually go into one of two buckets: travel or savings. I try to pay for my vacations with points and miles as much as possible, and my cash back helps me save on large purchases. With that, here’s a quick glance at how I fit my cards to my spending:

• My travel card, the Capital One Venture X Rewards Credit Card, earns 2X miles on purchases outside of its bonus categories (which are 10X miles on hotel and rental cars booked through Capital One Travel and 5X miles on flights and vacation rentals booked through Capital One Travel). I use it on all spending that bonus categories on my other cards don’t cover. This is also the card I use to book airfare with rewards.
• I’ve recently added the Capital One SavorOne Cash Rewards Credit Card to my strategy for food spending. The card earns 3 percent cash back on dining and at grocery stores and has no annual fee. I’ve gotten it to pool rewards with the Venture X. (With Capital One, you can transfer cash back to a miles-earning card, but not the other way around.)
• The Chase Sapphire Preferred® Card is my card for all my travel spending outside airfares. It earns 2X points on travel purchases, so it’s my go-to when I need to pay for parking, take an Uber, pay a toll, reload my public transit pass — you name it. Currently, the card also offers 5X total points on Lyft rides (through March 31, 2025). Most of my streaming subscriptions are on this card, and occasionally, I use it on food purchases too since it earns 3X points on dining (including eligible delivery services), select streaming services and online grocery purchases (excluding Walmart, Target and wholesale clubs).
• My Discover it® Cash Back lets me earn 5 percent back in various categories  (activation required) that rotate throughout the year (up to $1,500 in purchases per quarter, 1 percent back thereafter). I don’t charge on this card as much as I used to, but I move whatever cash back I earn to the savings account where I keep my emergency fund.
• My secret weapon: Affinity Cash Rewards Visa® Signature* earns 5 percent back where I spend the most (Amazon and bookstores). I transfer these rewards to an Affinity savings account where I save up for large purchases and other major goals, like home renovation and mortgage refinancing. (One can’t help but dream those mortgage rates will drop a couple of points one day.)
• The Capital One Quicksilver Cash Rewards Credit Card is my oldest credit card. It gets me 1.5 percent back on all purchases, which is less than what I earn with the Venture X. I keep a single recurring monthly charge to maintain some activity on the account. Closing it would be bad news for my credit since length of credit history is a credit score factor. The credit line on my Quicksilver is comparatively low but losing it could still negatively impact my credit utilization ratio — another potential blow to my credit.

I pay my credit card bills in full

This isn’t a very exciting tip, but without it, earning rewards is for naught. It’s unlikely that you will consistently get more than 5 percent back or 5X points on any rewards credit card, while the typical credit card interest rate is around 20 percent right now. If you carry a balance, it will easily offset your reward earnings.

Credit card debt is the enemy of maximizing your credit card rewards. The only exception is 0 percent APR credit cards. For example, I carried a balance on my Discover it Cash Back for a few months after I’d used it to furnish my apartment. The card offers a decent intro APR period, so I paid no interest during that intro period and lost no cash back to it (the current ongoing 18.74% - 27.74% Variable APR).

Just remember that the intro APR is only valid for the length of the promotional period. Additionally, be mindful of your credit utilization ratio (how much balance you carry compared to your available credit). Using more than 30 percent of your available credit can weigh your credit scores down until you pay down your balance.

Don’t feel bad if you find yourself carrying a balance. Many people do. Instead, focus on paying down the balance on any credit cards that have one. Instead of a rewards card, look into balance transfer cards which don’t charge any interest on transferred balances for a promotional period (often longer than 12 months). After all, rewards can wait.

I earn sign-up bonuses — when it makes sense

Welcome offers provide the best opportunity to score a large number of points. I try not to pass up such an opportunity whenever I can.

I didn’t get this chance with the Quicksilver, since that card was an upgrade from the Capital One Platinum Secured Credit Card for me.

However, I made sure to earn the Venture X intro offer, which back then was 100,000 miles (worth $1,000 in travel). Right now, you can get 75,000 miles (or $750 when redeemed for travel) for spending $4,000 in the first three months.

I’ve also recently earned the SavorOne bonus — $200 cash bonus for spending $500 on purchases within the first three months with the card. I’ve transferred this reward to my Venture X already where it will wait for the next time I book a trip.

I book airfare with the Capital One Venture X

The Venture X  is my travel credit card of choice, because it allows me to easily earn and redeem travel rewards.

The card offers a $300 annual credit for travel booked through Capital One, as well as a 10,000-mile anniversary bonus (worth $100 when redeemed for travel). I make a point to take advantage of these benefits every year as they fully offset the card’s $395 annual fee. Not to mention, the Venture X earns 5X miles on flights and vacation rentals booked through Capital One Travel.

For that reason, whenever I need to buy plane tickets, I also use the Venture X.

So far, I’ve booked six trips with the card at the 1 cent per point value. Some of them were booked with a combination of miles and cash. I try not to hoard rewards as they’re not immune to inflation.

If I’ve already spent the $300 annual credit, I also don’t mind booking outside of the travel portal when I find a much better deal elsewhere. The card allows you to use your miles on recent travel purchases, and that’s what I do in such cases.

I book hotels with the Chase Sapphire Preferred

I consider the Chase Sapphire Preferred my hotel card. It allows me to book hotel stays at a 1.25 cents-per-point value through the issuer’s portal without me having to worry about transfer partners (unless I choose to).

To compare, I used to have the American Express® Gold Card. I booked a hotel stay through the travel portal and got a meager 0.7 cents per point in value. None of the issuer’s three hotel partners worked for me. It was 0.7 cents per point or no hotel stay — the trip was spontaneous so I hadn’t saved up the money in advance.

With the Chase Sapphire Preferred, I don’t find myself in such situations. I like the solid value that applies to all portal bookings. Plus, the card provides up to $50 in annual statement credits toward hotel stays purchased through the Chase Travel portal.

I use my card benefits

A credit card’s value isn’t only in its rewards. For instance, I signed up for the Capital One Venture X because I wanted travel perks — and you can be sure I’m using them. I immediately enrolled in Priority Pass, and now I stop by a lounge in every airport I can. I have Global Entry and TSA PreCheck. I even got a car rental upgrade once because I took advantage of Hertz President’s Circle status (after enrollment, cardholders will remain at that status level through Dec. 31, 2024).

Not all benefits are that flashy, however. As an example, I never fail to use the Chase Sapphire Preferred’s Instacart perks. My complimentary Instacart+ membership I had gotten with the card expired a while ago, but I still earn up to $15 in statement credits on Instacart purchases every quarter. What can I say? I’m human. I reserve my right to be lazy. Plus, as of writing this perk is set to expire on July 31, 2024 — I might as well be lazy while I can justify it to my budget.

The bottom line

Putting some thought into your credit card strategy can be truly rewarding. It’s up to you to decide how much effort you’re ready to put in for extra card rewards, but the key takeaways are the following: Tailor the cards to your spending, not the other way around, and always pay your bills in full.

These two strategies will help you ensure you get the most out of your credit card rewards and avoid credit card debt.

The information about the Affinity Cash Rewards Visa® Signature has been collected independently by Bankrate.com. The card details have not been reviewed or approved by the card issuer.