Credit Cards How to Maximize Credit Cards Rewards Without Hurting Your Credit Read the Article Open Share Drawer Share this:Click to share on Twitter (Opens in new window)Click to share on Facebook (Opens in new window)Click to share on Tumblr (Opens in new window)Click to share on Pinterest (Opens in new window)Click to share on LinkedIn (Opens in new window) Written by Dan Miller Published Oct 14, 2020 - [Updated Jul 11, 2022] 4 min read Advertising Disclosure The views expressed on this blog are those of the bloggers, and not necessarily those of Intuit. Third-party blogger may have received compensation for their time and services. Click here to read full disclosure on third-party bloggers. This blog does not provide legal, financial, accounting or tax advice. The content on this blog is "as is" and carries no warranties. Intuit does not warrant or guarantee the accuracy, reliability, and completeness of the content on this blog. After 20 days, comments are closed on posts. Intuit may, but has no obligation to, monitor comments. Comments that include profanity or abusive language will not be posted. Click here to read full Terms of Service. There are many different credit cards out there, and consumers have a seemingly infinite array of payment choices. Banks know this, and so many banks offer rewards for using their credit cards. Banks and other financial institutions want their card to be at the top of your wallet, and they offer incentives to keep it there. The world of credit card rewards There are three main types of credit card rewards that you might take advantage of when using a card to make purchases. Signup bonus — Many cards offer an initial welcome offer for opening and being approved for a new card. You might get 60,000 airline miles after spending $3,000 in the first 90 days of having the card. Rewards for ongoing purchases — In addition, you’ll earn rewards for each of your purchases. Some cards offer a specific amount for all purchases, while others give higher rewards for spending in certain categories. Rewards for having the card — rewards in this category are things like a free checked bag for having an airline co-branded credit card, or a free hotel night each year on your cardmember anniversary. If you do the math, you can see that the return from signup bonuses is significantly higher than the return for everyday spending. Instead of getting only one or two points per dollar spent, you might get anywhere from 15 to 50 points per dollar when meeting the criteria for a signup bonus. One strategy that I have used to maximize credit card rewards is to sign up for new credit cards on a regular basis. “Doesn’t that hurt your credit?” By far, the #1 question I get whenever I tell someone about credit card rewards and how I have used them over the past several years is “doesn’t that hurt your credit?”. It’s a great question and shows that the person asking it is someone who is aware of how important a good credit score is to your overall financial health. Your credit score is a number that banks and other financial institutions use to get an idea of how likely you are to repay your debts. While not a perfect indicator, it is widely used across many areas of finance. Your credit score is primarily made up of five different components. Having several different credit cards can actually help with one of the biggest components – your utilization percent. As a practical example, my wife and I have been applying for several new credit cards each year for over five years and still maintain credit scores in the high 700s. Be organized – find a system that works for you Of course, the more credit cards you have and the more different types of rewards you accrue, the more complicated it gets. When you have just one credit card, paying bills and keeping track of expenses is pretty straightforward. But as you add more and more credit cards, it takes some organization to keep everything straight. Above all else, you want to make sure that you have a system set up in order to pay your bill, in full, every month. You might keep a spreadsheet, or a binder with baseball card sheets or a label maker to tell you which card to use in each category. Of course, one optimal way of tracking your bills and budgets is directly in the Mint app. Different things will work for different people — find the system that works best for you. Take it slow – it’s a marathon, not a sprint When some people first hear about credit card rewards, they go all out and just start applying for tons of credit cards in a short period of time. While this can be one strategy to rack up a ton of credit card rewards quickly, it’s not recommended, for two reasons. One is that applying for many new cards quickly increases the chances that you will make one or more mistakes. Another reason is that many banks and credit card issuers take a dim view of people that apply for many credit cards in a short period of time. Even with a great credit score and solid income, you may be denied for cards if you’ve applied for a lot of credit cards recently. A strategy that is likely to be more successful is to take it slow and space out your credit card applications. One every three to four months is a reasonable rule of thumb. If you have a spouse who also has good credit, you can double up new applications. But instead of just applying for any new cards that seem good, it’s best to come up with a plan first. Pick a trip that you want to take for free on points. Then, choose the cards that give rewards that will help you make that trip happen. The Bottom Line Credit card rewards can be a great way to add additional value, but only if you use them responsibly. You can choose to maximize either airline miles, hotel points, or straight-up cashback. Credit card rewards can be used for travel or as statement credits. In order to maximize your credit card rewards, make sure to stay organized, take it slow in applying for new cards, and always remember to pay your credit card bill in full each and every month. Previous Post 17 Questions to Ask Your Mortgage Lender Next Post National Get Smart About Credit Day Written by Dan Miller Dan Miller is a freelance writer and founder of PointsWithACrew.com, a site that helps families to travel for free / cheap. His home base is in Cincinnati, but he tries to travel the world as much as possible with his wife and 6 kids. More from Dan Miller Follow Dan Miller on Facebook. Follow Dan Miller on Twitter. Browse Related Articles Mint App News Intuit Credit Karma welcomes all Minters! 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