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Before you switch up your credit card spending strategy or consider applying for a new credit card, it’s important to analyze your cash flow. How much money are you spending a month? A year? What categories do you spend the most in? What do you ultimately want or need from a rewards credit card? Start by using a or a pen and paper to figure out how much you spend each month and on what. Whether you’re feeding your soul with home cooking or convenient takeout, racking up travel miles in your car or with your favorite airline, make sure you understand where your money is actually going so you can choose a card that will reward you for spending you’re already doing. Understanding how much you spend will help you anticipate what your rewards yield will be each year (often higher the first year if your card has a welcome offer) and therefore whether an annual fee is worth it. If you don’t actually spend enough money on a credit card each year to , that card is probably not the best for you. Once you’ve identified how you’re using your credit card, you can identify which type of card will best suit your lifestyle and existing spending. Common spending categories
The best type of card for everyday spending is generally a , as you’ll earn the same rewards rate no matter what you buy. While makes a lot of sense, a card with a slightly lower flat rate may offer additional perks that make it a better fit for your spending. If you spend a lot on dining out or takeout, there are a number of cash back cards with generous purchases. If your biggest spending is on groceries to cook at home, you may be best served by one of the , and a card focused on makes more sense if you have a long commute or road trip a lot. 2 Choose a card with a solid sign-up offer
If you’re in the market for a new cash back card, do your homework to make sure you’re getting a great with a minimum spending requirement you’ll easily be able to meet. There are plenty of cash back , including: : $200 cash bonus when you spend $500 on your card within three months of account opening : $200 online cash rewards bonus when you spend $1,000 in the first 90 days of account opening : Earn $900 bonus cash back after spending $6,000 on purchases in the first three months from account opening 3 Find cards that offer bonus cash back in your biggest categories
Once you’ve determined where you actually spend your money month-to-month, you’ll want to apply for the cash back card that pays you the best dividends for your own personal finance habits. For example, if a large percentage of your money goes to groceries each month, you’ll want to match your spending with the right cash back card. For example, the offers cardholders 6 percent cash back on spending at U.S. supermarkets (on up to $6,000 in purchases per calendar year, then 1 percent). 4 Diversify your spending strategy
There are a few steps you can take to make sure you’re getting the most out of each of your credit cards. To start, you shouldn’t play favorites with your cash back cards. It’s smart to not focus all your cash back earning on a single credit card. While it’s great that you’re earning 6 percent cash back on U.S. supermarket purchases (on up to $6,000 per year, then 1 percent) with the , you don’t need to settle for just 1 percent cash back on most other purchases. Keep a second card in your wallet, like a 2 percent flat-rate cash back card you can use for your spending that doesn’t qualify for a higher-earning bonus category. Do some research on all your cards and identify what each is best for. Add a small label to your card as a reminder of what to use it for, give each card a helpful nickname in your digital wallet or slip a hand-written legend into your wallet so you’re prepared to use the right card at the right moment. 5 Register for quarterly bonus categories
If your cash back card has , keep an eye on your issuer’s and activate bonus categories each quarter. This way you’ll be eligible for the bonus cash back rate. Otherwise, you’ll only earn the base rate, usually 1 percent on all your spending. , for example, earns 1 percent cash back on all non-category purchases, but also offers 5 percent cash back on up to $1,500 in activated spending each quarter (then 1 percent). Make sure you’re enrolled in these offers and max them out whenever your spending allows. 6 Make the most of special offers and shopping portals
If you want to earn more cash back, combine your favorite cash back credit card with a handy shopping portal. You can often earn more rewards on every online purchase you make by clicking through a shopping portal for your favorite store, then paying with your favorite cash back card. like Ibotta, Rakuten (formerly Ebates) and Dosh give you a percentage of your spending back on qualifying purchases—on top of the cash back you’re earning on your credit card. Before you shop—whether in-person or online—look out for card-linked offers from your credit card issuer. Stay up to date on any additional rolling bonus offers your card issuer has for the cash back card you carry. These offers are normally found in your online account, have limited redemption windows and need to be opted into individually. You can also check out our guide regarding additional perks and benefits for your credit card and rewards. Card-linked offers and special promotions are ever-changing, so it’s a good idea to check regularly for updates. 7 Use your cash back wisely
Using your cash back rewards wisely is just as important as maximizing your cash back earning opportunities. Many people choose to use their cash back rewards as statement credits to offset their monthly spending, but getting a rebate on money already spent isn’t the only option. Pay yourself forward with your cash rewards by saving up for a big purchase you might not otherwise buy, or invest your returns each month and let your cash back pay you longer-term dividends for the future. The bottom line
If you take a little time to spend strategically, you’ll be raking in cash back rewards before you know it. You can maximize your cash rewards by using the right cash back card for as many of your everyday purchases as possible. In the meantime, you’ll also want to avoid carrying a balance so you won’t have to pay interest on your purchases. With the currently over 16 percent, racking up rewards won’t make any sense if you also rack up long-term debt. SHARE: Jacqueline is a contributor for Bankrate and has worked with more than a dozen financial brands, including , , , , , , , SoFi and Northwestern Mutual, providing thoughtful content to give readers insight into complex topics that they likely didn’t learn in school. You can learn more about her work and connect with her on or at . Sometimes . Mariah Ackary is a personal finance editor who joined the Bankrate team in 2019, excited by the opportunity to help people make good financial decisions. Send your questions to