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You only use one credit card? How my multiple-card strategy can make you more money during Cyber Monday and the rest of the year

It’s not unusual for married couples to fight about finances. In my case, the arguments rarely have to do with how much my wife and I spend, but rather, which credit card she has used.

You see, I have a system in place. If the charge is for dining out, it has to go on a card that offers a 4% cash-back reward for that category. If it’s for groceries, it should go on another card with a 3% reward for supermarket spending. And if it’s for… well, you get the idea.

In short, I’m a rewards junkie. And yes, my wife thinks I’m nuts. (And she often ignores the “rules.”)

But I’m not necessarily alone. Plenty of us try to maximize the cash-back dollars or points or miles that we can earn through our credit-card usage. After all, there’s money to be made — in my case, the annual rewards easily top $500 — or the equivalent in flights, hotel stays or merchandise and gift cards. That’s especially true during the holidays when our spending naturally increases (Cyber Monday is coming up, after all).

And that’s to say nothing of the fact that card issuers are making a renewed push to get us to apply for new cards, with sign-up offers galore, as we continue to emerge from the darkest days of the pandemic — some of us flush with savings. Rewards are becoming slightly more generous, too: A recent Wall Street Journal article noted that cash-back cards now offer an average 1.11% per dollar spent, which is the highest mark since at least 2010. (Miles and points cards also have climbed to their highest figure — 1.2 miles or points per dollar spent — in over a decade.)

So, what’s the best way to reap those rewards? I’ll walk you through how I do things, and also share some tips from the experts.

Don’t think about rewards if you don’t pay off your bill in full each month: The key to any rewards strategy is to reap as much as possible, but it’s hard to achieve that if you’re paying 16% in interest on your balance each month (and that’s just the average interest rate, according to Bankrate’s CreditCards.com site.) Similarly, if getting a rewards card is going to entice you to charge more than you should, then forget about it. “You should definitely understand your spending habits before you get involved in this,” said Roger Tran, a Certified Financial Planner with Facet Wealth, a virtual advisory firm.

Figure out if you’re a cash-back or a miles/points person: There are two very different approaches when it comes to credit cards. If you like to travel, you might want to go the miles/points route, particularly with a card connected to a favorite airline or hotel chain. But if you’re more a stay-at-home type, such as myself, cash-back could be the way to go. In general, miles/points cards offer more bang for the buck — and The Points Guy website provides a useful (and regularly updated) guide to the cash-equivalent value of miles and points. But the cards also pose challenges of their own, especially in an era when airlines and hotels make it increasingly difficult to use miles and points for their maximum worth. “We’ve seen a lot of devaluation,” said Ted Rossman, a senior industry analyst with CreditCards.com. Oh, and don’t forget: Many points/miles cards have an annual fee, so that should be considered when weighing their value.

You can benefit from having more than one card: You can mix-and-match cards to boost your potential rewards — just like I mentioned with my strategy of using one card for restaurants, another for groceries, etc. With some cash-back cards, the spending categories offering the highest rewards (say, 5%), from dining to gym memberships, do change quarterly. Or the cards may require that you pick from a list of categories every three months. As a rule, I like to use one cash-back card that has a 2% reward — there are quite a few that fit the bill, Rossman notes — for my everyday spending. Then, I sprinkle in others depending on what I’m buying. For that matter, there’s no saying you can’t mix-and-match cash-back and miles/points cards, too.

Grab those bonuses: Your biggest gain with credit-card rewards often comes up front — namely, the sign-up bonus. Typically, these require a certain amount of spending, such as $1,000 in the first three months, to earn the extra reward. Which means if I’ve got a new card with a bonus, it tends to take precedence over the other cards in my wallet — at least until I hit the required spending mark. It’s also worth noting you can double-dip, so to speak, by having your spouse apply for the card. But there are reasons to be cautious when applying for new cards. Which brings me to…

The caveats: You can push the envelope too far in playing the rewards and bonuses game, experts warn. They suggest going easy on those card offers, since grabbing too many can do damage to your credit score. “It’s one of the basic rules: Don’t apply for too much credit too often,” said Matt Schulz, chief industry analyst with LendingTree. On top of that, card issuers often reject applications from those who keep applying — they’re wary of “churners,” as folks like me are called (and trust me, I’ve gotten more than my share of rejections).

Ultimately, there’s another risk: The more cards you have, the more difficult it becomes to manage them. I’ve learned that it helps if you set up all your cards on automated payment, but even then, I’ve missed a first payment on a new card because I was less than organized. I also recognize that there are those who don’t want to spend a chunk of their life worrying about an extra percent gained in rewards; people like my very rational wife. Speaking of which, I need to remind her again about which cards to use for our holiday shopping…

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