Credit card rewards are a gift that keeps on giving. Rewards are usually in the form of points or cash back; and if you play your cards right (no pun intended), credit card rewards can send you on free trips, put you in fancy hotels, or help you buy big-ticket items – all without ruining your credit rating. 

Of course, you should always try to spend responsibly to avoid deeper debt, because while the focus is on pursuing rewards, don’t live and spend beyond your means. Rewards are less effective, or even worthless, if you fall into debt chasing them. 

Here are three ways to maximize your credit card rewards without messing up your finances. 

Get reward points for items you already buy 

A good way to maximize your credit card reward strategy is to use it like a debit card. Buying gas? Paying bills? Taking a trip to the grocery store? Use your credit card to quickly rack up points and cash back.

This strategy, however, is not without risk. You’ll want to follow your monthly budget and keep track of your spending. A good way to manage this is: for every dollar you spend on your credit card, keep matching funds in your bank account. 

So, if you spend $500 on groceries and gas, you should have immediate access to $500 to pay off those charges. 

Understand where you can get the most credit card rewards for your buck 

Credit cards may have several bonuses that can multiply the rewards received. 

While some cards offer a flat return on all purchases, others often give more rewards if you use them for specific categories. That could be groceries, gas, or dining out at restaurants. Some even allow you to earn extra money when paying for monthly streaming subscriptions. 

It cannot be stressed enough: use your credit cards wisely. Having said that, receiving a higher percentage cash back for activities you frequently participate in is an excellent way to build a treasure chest full of rewards currency. 

Pay off your credit card balance every month 

It’s good practice to pay your credit card balance every month. Moreover, it’s a key component to having complete freedom in how you spend your rewards. 

Some cards will give you cash back and allow you to submit those credits to your monthly statement. You can also do it with points, but it’s not as effective a method of maximizing your rewards. 

A fully paid-off balance increases your creditworthiness, but more importantly, a zeroed balance will let you spend those points and cash on items you actually want. If you can’t find something you want, you can continue letting the rewards build. Most credit card companies will even let you trade in points or cash back for a monetary check.

You can maximize your credit card rewards in several ways and this can cushion your pockets a little and help make your life a little easier. Just remember to stay within your budget and spend responsibly!

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