This post contains references to products from one or more of our advertisers. We may receive compensation when you click on links to those products. For an explanation of our Advertising Policy, visit this page.

The world of rewards credit cards can often be complicated. Whether you have an arsenal of heavy hitters or are just starting off, it’s always important to know where you stand. The best way to maintain and improve your credit and your rewards strategy is to follow these steps on a regular basis. Here’s an outline of what to do and how often to do it.

Every Week

Pay Your Statement Balances in Full

This one is the most important. Since 35% of your credit score is based upon late or missed payments, you want to make sure that you don’t miss a payment. Not only will missing a payment hurt your score, but the unpaid amount will accrue interest and become even harder to pay back.

Consider Paying Down Your Balances Before Your Statement Closes

This might seem the same as paying your statement balance in full, but there is a key difference. 30% of your credit score is determined by the amount of money you owe. However, the amount of money you owe is only reported once your statement actually closes. For example, if you spend $1,000 on your credit card, but then you make a payment of $800 a couple days before your statement closes, your statement will only show a balance of $200. This number is what the credit agencies see, and is the number that factors into your score. And since almost a third of your score is determined by the amount of money you owe, you can see fairly drastic changes to your score on a month-to-month basis by using this tactic.

Keep Track of Your Income and Expenses

It can be easy to lose track of your money when you primarily use credit cards. You should always know how much money you have in total, and how much you’ve been spending and how much you’re bringing in. Stay up to date on your net worth by using one of these apps. If you ever find yourself spending outside your means, make a change fast; overspending is the easiest way to start missing payments and critically damaging your credit score, hurting your ability to be approved for other lucrative cards down the road.

For most, it may be easier to use an app to track your income and expenses. (Photo via Shutterstock)

Keep Track of Your Earnings and Rewards

One of the best parts about being a credit card enthusiast is all of the points and miles you can accrue over the years. Don’t let them expire or go to waste! Lots of point currencies don’t have an expiration date; Amex Membership Rewards points and Chase Ultimate Rewards points don’t expire as long as you keep your MR or UR accounts open. But currencies such as AAdvantage miles and United miles expire after 18 months of inactivity on your account.

It’s usually easy to get around these expiration dates, sometimes by just transferring miles from one place to another or going through a shopping portal to constitute “activity.” But stay on the safe side and make sure you stay up to date with all of your points and miles balances.

Every Month

Make Sure You’re Getting Value Out of All Your Cards

The more credit cards you get, the easier it is to lose track of their various benefits and annual fees. Go through your arsenal and figure out which cards you rarely use anymore. If a card doesn’t have an annual fee, there’s no need to cancel it; in fact, canceling could hurt your credit score, since 15% of your score is determined by length of credit history.

If a card does have an annual fee, that doesn’t necessarily mean you need to cancel it. Even if you’re not getting regular use out of a card, trying calling the issuing company to see if it’ll waive the fee for a year. It might even offer a bonus to incentivize you to keep and use the card.

Another option is trying to downgrade an annual fee card to one within the same network that has no annual fee. This way you won’t be stuck having to pay an annual fee, but you also won’t have to lose your history on that line of credit. For example, if you find yourself not getting value out of your $450 annual fee Chase Sapphire Reserve, you can downgrade it to the $0 annual fee Chase Freedom without losing that line of credit.

Even though closing accounts can hurt your score, don’t keep paying annual fees that aren’t worth it for you. Depending on how much other credit history you have, canceling a card can have a fairly modest effect on your score. As for the dormant cards you decide to keep, just make sure that you’re making at least one purchase on each of them about every 6 months so that the card issuer doesn’t cancel your account due to inactivity.

Make Sure You’re Maximizing Your Returns

With just one credit card, you don’t need to think much about when to swipe it. Throw a few more in the mix, and you have to figure out which card to use for your purchases. Your Chase Freedom might only give you 1 point per dollar on all purchases, but in the right quarter of the year, that becomes 5 points per dollar on something like gasoline.

Figuring out which card to use can be a challenge, but is worth it for the rewards.
Figuring out which card to use for what purpose can be a challenge, but it’s worth it for the rewards.

In terms of getting maximum value from your cards, it’s also important to make sure that you’re in a position to earn sign-up bonuses on new cards. Make sure you know the terms of the sign-up bonus when you apply, and ensure that you’re in a financial position to hit that spend requirement. Also stay on top of exactly how long you have to hit the mark; the clock usually starts the moment you’re approved, not when you activate your card after getting it in the mail.

Every Year Or So

Have a Long-Term Plan

When it comes to rewards credit cards, you can never been too on top of things. So every once and a while it’s good to take a look a little further down the road at where you’d like to be in the future. Say you’re a college senior just starting off. You might only have one card now, but what about 6 months from now? Or two years from now? If you plan on applying for several new cards, know your credit score, your approval odds and how those hard credit pulls will affect your credit. Don’t get hindered by caveats like Chase’s 5/24 rule. Know which cards will suit you best as you enter new jobs, new cities and new chapters in your life.

Bottom Line

The long-term game plan is what will most help craft your arsenal of credit cards through the years. If you’re able to strategically apply for the right cards over time, you’ll be on the way to earning loads of points year in and year out. However, that isn’t to say that the other items on this checklist aren’t just as important. Every tip listed here will help you stay on top of your credit and thrive in the world of rewards credit cards.

Featured image by Glenn Carstens-Peters via Unsplash.

Know before you go.

News and deals straight to your inbox every day.

2018 TPG Award Winner: Mid-Tier Card of the Year
Chase Sapphire Preferred® Card

NEW INCREASED OFFER: 60,000 Points

TPG'S BONUS VALUATION: $1,200

CARD HIGHLIGHTS: 2X points on all travel and dining, points transferrable to over a dozen travel partners

Apply Now
More Things to Know
  • Earn 60,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $750 toward travel when you redeem through Chase Ultimate Rewards®
  • Chase Sapphire Preferred named "Best Credit Card for Flexible Travel Redemption" - Kiplinger's Personal Finance, June 2018
  • 2X points on travel and dining at restaurants worldwide & 1 point per dollar spent on all other purchases.
  • No foreign transaction fees
  • 1:1 point transfer to leading airline and hotel loyalty programs
  • Get 25% more value when you redeem for airfare, hotels, car rentals and cruises through Chase Ultimate Rewards. For example, 60,000 points are worth $750 toward travel
  • No blackout dates or travel restrictions - as long as there's a seat on the flight, you can book it through Chase Ultimate Rewards
Intro APR on Purchases
N/A
Regular APR
18.24% - 25.24% Variable
Annual Fee
$95
Balance Transfer Fee
Either $5 or 5% of the amount of each transfer, whichever is greater.
Recommended Credit
Excellent/Good

Editorial Disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

Disclaimer: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.