If you’re not a habitual over-spender, credit cards can be a great resource to help you build credit while providing an array of perks and benefits.

Here are six ways you can get the best bang for your buck with credit card rewards.

5 tips to maximize credit card rewards

Determine what kind of spender you are

There are three main types of rewards credit cards: cash back, points, and miles. Deciding which is best for you depends on what kind of spender you are.

Cash-back cards are pretty much exactly what they sound like. Card users earn a certain percentage of cash back on every purchase they make. Points cards work similarly, except instead of getting cash back on purchases, you get points, which generally works out to 1 cent = 1 point. Points can typically be redeemed for several things, including gift cards and statement credits.

Airline miles or travel credit cards let you buy flights or pay for a portion of a flight with your “miles.” These are ideal for frequent flyers who want to save money on airfare, hotels, or car rentals.

Don’t carry a balance

When using a credit card, ideally you don’t want to carry a balance so you can avoid paying interest. Plus, if you’re charging purchases just to get rewards but you roll over a balance every month, you’re negating any rewards you earn by paying interest.

Of course, you can’t always avoid carrying a balance. But high-interest credit cards can quickly build up debt. If you find yourself in credit card debt, you may want to look at debt consolidation loan rates to see if you can get a lower rate and save money on interest.

Get that sign-up bonus

Many rewards credit cards offer significant sign-up bonuses when you spend a certain amount within the first few months of opening your account. These bonuses can be worth several hundred dollars, and if you can hit it with your everyday spending, it won’t require much effort on your part.

If it’s going to be a stretch to reach the bonus threshold, you may want to consider if you’ll need to make a large purchase over the duration of your sign-up bonus period. And if you don’t have any major purchases coming down the pike, you could think about charging your rent on your credit card—assuming you won’t face a ridiculous fee to do so.

Strategize big purchases

Opening a new credit card with a large sign-up bonus shortly before making a big purchase can potentially help you pay for said big purchase, assuming you’re able to open a new rewards credit card. It’s not wise to open several new lines of credit in quick succession as your credit score can take a hit.

Alternatively, if you’re not in a good spot to open a new account, think about which credit card makes sense to put your purchase on—if you have multiple cards, that is. And if you don’t have multiple cards, consider if your card has revolving rewards or lets you choose your highest-earning cash-back category. For instance, if you’re looking to buy a new TV and your cash-back rewards card offers 5% cash back on entertainment this quarter, now’s probably a good time to pull the trigger.

Activate quarterly rewards

The one downside of cards that offer quarterly rewards is that you have to be mindful to activate the rewards every three months. But don’t worry—most cards will send you reminders to activate your rewards. If you don’t, you’ll miss out on that extra boost, which can get you up to 5% on revolving categories. For example, your card might offer 5% cash back on popular online shopping sites like Amazon, Walmart, and Target during Q4—just in time for all your online holiday shopping.

By Casey Musarra

Casey Musarra is a personal finance writer with over a decade of writing experience and a credit score hovering near 800. She has written several hundred articles on topics ranging from taxes to debt-free living. Previous bylines include newsday.com and philly.com.

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