How do I maximize credit card rewards?

To maximize your credit card rewards, start by comparing credit card offers to make sure you have the most rewarding cards for your spending habits. Then, use whichever card has the highest rewards rate for the purchase category whenever you buy something, and pay the cards’ bills in full monthly to avoid interest. Finally, redeem your rewards regularly in order to maximize your enjoyment.

That’s how to go about it at a high level. Of course, there’s a bit more involved in maximizing your credit card rewards, and you can see the details in the step-by-step list below.

How to Maximize Your Credit Card Rewards

1. Get a card with rewards that match your spending habits.

   It’s important to find a card that fits your lifestyle. For example, there’s no point in investing in an airline credit card with a hefty annual fee if you fly only once a year. Rather, if you’re a frequent traveler, dine out regularly, or spend a lot on groceries, for instance, find a rewards card that will pay you extra for those purchases. Or, if you want something less complicated, get a card that pays a flat cash back rate on all of your purchases.

   Below, you can see some of the top rewards card options available right now.

   • Overall: Chase Freedom Unlimited®Chase Freedom Unlimited®Learn MoreLearn Moreon issuer's website
   • Rates & FeesNo Annual Fee: Wells Fargo Active Cash® CardWells Fargo Active Cash® CardLearn MoreLearn Moreon issuer's website
   • Rates & FeesTravel: Capital One Venture X Rewards Credit CardCapital One Venture X Rewards Credit CardLearn MoreLearn Moreon issuer's website
   • Rates & FeesTerms ApplyBonus Cash Back: Blue Cash Preferred® Card from American ExpressBlue Cash Preferred® Card from American ExpressLearn MoreLearn Moreon issuer's website
   • Fair Credit: Upgrade Cash Rewards Visa®Upgrade Cash Rewards Visa®Learn MoreLearn Moreon issuer's website
   • Rates & FeesBad Credit: Capital One Quicksilver Secured Cash Rewards Credit CardCapital One Quicksilver Secured Cash Rewards Credit CardLearn MoreLearn Moreon issuer's website

2. Use multiple cards to get the best rewards.

   This is known as the Island Approach. For example, if you have a card that earns 5 points per $1 spent on gas, you could use that card primarily for gas purchases and put your groceries on a card that offers a high rewards rate at supermarkets.

   On the other hand, if you have a card with a big spending requirement for an initial bonus, you might want to focus your purchases on that card until you qualify for the bonus.

3. Pay your balance in full.

   When you keep a balance on a rewards card, interest charges may cancel out any rewards you earn. If you’re after financing options, check out WalletHub’s editors’ picks for the best low interest credit cards.

   Avoid any late or missed payments, too. Not only will a late fee further eat into your savings from rewards, but you could end up forfeiting any rewards you’ve earned altogether.

4. Know each card’s rewards terms.

   In addition to understanding when exactly you will earn rewards and how quickly those rewards will be credited to your account, it’s important to make sure any spending requirements for sign-up bonuses are attainable. Also, familiarize yourself with the card’s ongoing rewards and redemption rates. Rewards come in three main currencies: cash back, points, and miles. Cash back is straightforward, but points and miles can be redeemed for many things, including cash, gift cards, merchandise, charity donations and more. Rewards points and miles often have different values when redeemed for different things, too.

5. Redeem often.

   Try redeeming miles or points periodically rather than stockpiling them. Rewards generally don’t expire as long as your account is in good standing, but in some cases, you could lose earnings if there’s no activity on your account. And if you close your account, you will lose all of your unredeemed rewards. Plus, if you have points or miles, the issuer can devalue them at any time.

6. Redeem for the most valuable option.

   Rewards cards, particularly points and miles cards, often have multiple redemption options. For example, you might be able to redeem your rewards for cash back, travel, gift cards or merchandise. Some cards may offer different redemption values for different options – for instance, a point may be worth 1 cent toward travel and 0.5 cents toward cash back. Therefore, to maximize credit card rewards, you should redeem for the most valuable option.

7. Take advantage of initial bonuses.

   Some credit cards offer bonus rewards for spending a certain amount within the first few months. If you get a card with this type of bonus, you should make sure to spend enough to qualify, provided that it doesn’t make you overspend by more than the value of the bonus. The best time to get a card with a big initial bonus is right before you’re about to make a big purchase, so you can earn the bonus quickly and offset some of the cost of the big purchase with your rewards.

You can learn even more about credit card rewards and how they work on WalletHub. You can also compare the best rewards credit cards to find one that’s a good option for you.