How to Responsibly Maximize Your Credit Card Rewards

The most important thing to remember: Don’t let your thirst for rewards blind you to the dangers of excess debt.

As any sports fan will tell you, the more points, the better. And while the kinds of points you’ll receive on your credit card are a little bit different than a touchdown, dunk, or home run, racking them up can still give you quite a thrill.

But while there’s no such thing as, say, a basketball game where the point totals are “too high” (Hey Warriors, stop being cowards and drop 200 on someone, please), the same isn’t true for credit card rewards. In fact, it’s much too easy to go overboard in your pursuit of extra points or miles.

Getting the most from a rewards card means balancing responsible spending with aggressive and strategic points accumulation. With that in mind, Here are some helpful tips to help you responsibly maximize your awesome rewards.

Resist the urge to spend beyond your means.

This the most important thing to remember when it comes to maximizing your points or rewards. If you end up going into debt and accumulating interest charges, then it won’t really matter how many points or miles or whatever that you earn. Rewards are nice, but they’re not worth taking on additional debt.

“It’s no secret credit card rewards can be a great way to save a little bit of cash on the side,” said Kevin Michels, CFP®, EA, a financial planner with Medicus Wealth Planning. “However, the purpose of credit card rewards program is to get buyers to spend more money which increases the chance of carrying a balance on your credit card that racks up interest.

“I only recommend using a credit card for reward purposes if you are financially stable, have a consistent monthly positive cash flow, and only use the card for credit building and reward purposes.”

If your income is inconsistent or you’re constantly turning to bad credit loans like payday loans and cash advances to bridge financial gaps, then a rewards card is not a good idea. It’ll almost certainly lead to you taking on burdensome credit card debt.

The key to using a rewards card is the same as the key to using any credit card: don’t spend more than you can actually afford. If you can’t pay off your card in full every week—or every two weeks at most—you probably shouldn’t be using relying on credit cards at all.

One (or two) cards to rule them all.

“As a Certified Professional Organizer, I can tell you that some people forget those rewards even exist,” said Darla DeMorrow (@darlademorrow) of HeartWork Organizing. If they are used to carrying debt, they may have a handful of credit cards that they spread their purchases out over—never realizing that if they just chose one or two cards, they could consolidate not only their energy and bills but also their rewards.

Morrow said she commonly sees people “overwhelmed by too many bills, too much mail, and too many credit accounts to keep track of. They can’t even keep track of their real money, let alone the ‘fake money’ like rewards points.”

Limiting yourself to one or two cards not only makes your points easier to track, but it lets you put all of your efforts toward your cards with the best rewards. If you want to use points for travel, what good is a $25 Barnes and Noble gift card going to do you—or vice versa?!

Another thing to keep in mind when it comes to keeping yourself organized and on track: Many cards come with a requirement that you spend “X thousands of dollars within X number of months in order to earn X number of rewards/points/miles.”

If you’re going to sign up for this card, make sure that those goals are actually achievable without putting more on the card that you can afford. These sign-up bonuses can be incredibly enticing, just don’t let them blind you to your sense of fiscal responsibility.

Use them for holiday shopping.

“A good practice is to evaluate all of your points balances each fall, and plan to spend those points to use for holiday shopping,” said Demorrow. “By redeeming points for store gift cards to major retailers like Amazon, Target, Walmart, Home Depot and Best Buy, people can eliminate their holiday bills altogether.”

You might be surprised by her next piece of advice, but it makes sense in a world where trying to keep track of too many things at once can drive you absolutely batty:

“I don’t find it’s necessary to actually track points. Just use them once a year, if you aren’t already using them for a big travel reward.”

Don’t spend your rewards, invest them!

Most people think about rewards as being something you use for fun stuff like gift cards or vacation travel. But that doesn’t mean they can’t be used for something that’s a little more boring, but a whole lot more fiscally responsible.

“I would recommend not using a rewards card for miles or cash back but use one that automatically deposits your rewards into an investment account such as an IRA, Roth IRA, or brokerage account,” offered Michels.

“Fidelity offer a VISA that gives you back two percent of spending if you automatically deposit it into an investment account.  Consider someone who spends $3,000 per month on a card and pays it back each month. Each month $60 is deposited into their retirement account.

“Growing at 7% per year for 30 years, they would have a balance of about $70,000.  That’s almost half of the average retirement savings of a 60-year old and is accomplished by simply auto-depositing your rewards into an investment account.”

Don’t let chasing rewards drive you crazy.

Don’t forget the reason that credit card companies include these rewards in the first place: It’s to get you to spend more. It can be easy to overspend with any credit card—doubly so when you’re literally getting rewarded for doing so!

You can’t let that happen. Luckily the solution is fairly simple: Treat your credit card like it’s a debit card and don’t spend more than you currently have in the bank. Sure, there will always be those “it’s one day before payday” exceptions, but just don’t make them a habit.

“It still only makes financial sense to buy something on credit if you can afford to pay it off in the current bill cycle,” said Demorrow. “Never buy something on credit for the points unless you can pay it off. Trading debt with an interest rate for points that may or may not turn into a reward is just crazy. It devalues the points, sometimes to no value at all.”

In other words: If all those credit card points aren’t adding any real value, then they’re actually kind of … pointless.

To learn more about managing your money responsibly, check out these related posts from OppLoans:

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Darla DeMorrow’s (@darlademorrow) business and blog, HeartWork Organizing, helps people lead more peaceful lives. She is a mom of two and international speaker who published the first of its kind book for women, The Pregnant Entrepreneur.  Her book series starting with Organizing Your Home with SORT and Succeed outlines five simple steps to help you organize stuff, time, information and even your money. Get your free copy of 31 Simple Tips for Organizing Nearly Everything at
Kevin Michels is a Certified Financial Planner™ (CFP®) and the President of Medicus Wealth Planning.  As a fee-only financial planner, Kevin takes pride in working as a fiduciary with all his clients.  Kevin actively participates in the financial planning community by serving on the Public Relations committee of the Financial Planning Association, Utah Chapter  Kevin has also been quoted and published in a variety of news outlets including MSN Money, NASDAQ, Investopedia, the Penny Hoarder, and Utah Business Magazine.

The information contained herein is provided for free and is to be used for educational and informational purposes only. We are not a credit repair organization as defined under federal or state law and we do not provide "credit repair" services or advice or assistance regarding "rebuilding" or "improving" your credit. Articles provided in connection with this blog are general in nature, provided for informational purposes only and are not a substitute for individualized professional advice. We make no representation that we will improve or attempt to improve your credit record, history, or rating through the use of the resources provided through the OppLoans blog.