The Golden Rule
Never carry a balance to earn rewards. Credit card interest (often 20%+) will always exceed any rewards you earn. Pay your full balance every month, or rewards become pointless.
Strategy 1: Use Category Cards
Different cards excel in different spending categories. Using the right card for each purchase maximizes your return.
Groceries
3-6% back with cards like Amex Blue Cash Preferred or Citi Custom Cash
Gas
3-5% back with cards like Citi Custom Cash or Sam's Club Mastercard
Dining
3-4% back with Capital One Savor or Chase Sapphire
Everything Else
2% flat rate with Citi Double Cash or Wells Fargo Active Cash
Strategy 2: Maximize Sign-Up Bonuses
Sign-up bonuses are often worth $200-750 in cash or points. Key tips:
- Only apply when you can meet the spending requirement organically
- Time applications around large planned purchases
- Space applications out (every 3-6 months) to minimize credit score impact
- Never spend extra just to hit a bonus threshold
Strategy 3: Stack Rewards
Combine multiple reward sources for maximum value:
Example: $100 Purchase
- Shopping portal: 3% back ($3)
- Credit card: 2% back ($2)
- Store rewards: 5% points ($5 value)
- Total: ~10% return
Strategy 4: Rotating Categories
Cards like Chase Freedom Flex and Discover it offer 5% back on rotating categories each quarter. Maximize these by:
- Setting calendar reminders to activate each quarter
- Stocking up on gift cards when relevant stores are featured
- Using the card exclusively for bonus categories
Strategy 5: Points Transfer
Premium cards like Chase Sapphire and Amex Platinum let you transfer points to airline and hotel partners, often at 1.5-2x value. This turns 50,000 points worth $500 in cash into $750-1000 in travel.
Common Mistakes to Avoid
- Carrying a balance: Interest destroys all reward value
- Forgetting to activate: Quarterly bonuses require activation
- Chasing rewards: Don't spend more just to earn points
- Ignoring annual fees: Make sure rewards exceed the fee
- Letting points expire: Use them or lose them
Simple 2-Card Setup
Don't want to manage multiple cards? A simple 2-card setup works great:
- Category card: 3-6% on your biggest spending category (usually groceries or gas)
- Flat-rate card: 2% on everything else
This beats 1% cards significantly with minimal effort.