Rewards cards can be a great way to earn a little extra cash---but they can also drag you into debt. How to maximize rewards without going into the red.

Credit card rewards may feel like nothing more than a small bonus—a few extra dollars to fritter away on something frivolous—but used deliberately they can make a real contribution to your income. If you pay your bill in full every month—and if you’re going to bother with rewards credit cards at all, you must—it’s literally free money:

Banks, of course, do not offer rewards out of the goodness of their heart. Banks offer rewards because they want you to spend money, carry a balance, and incur interest and fees.

If you see the rewards game as just that—a game—then it’ll be easier to make good decisions about spending. If you play the game right, the bank actually pays you for using its credit card.

Here’s how to maximize your returns without racking up balances you can’t pay off at the end of the month.

Pick a card for your recurring bills (and only for your recurring bills)

Here’s the rule: I put all my recurring monthly bills (health insurance, Internet, cell phone, streaming subscriptions) onto one card and charge nothing else to this card. Adding unpredictable expenses on top of fixed monthly costs would make tracking my spending just a smidge more complicated, and thus a smidge more likely to fail.

Find a card (or cards) that suits your life

There’s a lot of talk about what’s the best rewards card, but “best” will always be relative.

Travel hackers love Chase Sapphire Preferred® Card, but I rarely travel and would have to really stretch to spend the necessary $4,000 in first three months to get that 60,000 point sign-up bonus.

Instead, I work with the cards I have. I’ve long had the Chase Freedom Flex℠ (with its rotating 5% cash back on bonus categories up to $1,500 each quarter activated). I discovered that the Amazon Visa I signed up for a decade ago (and now rarely use) gave me two points at restaurants and drugstores, where I happen to spend a fair amount of money. (I really love iced coffees.)

The only new card I got was the American Express Blue Cash Preferred card. It gives me 6% cash back at grocery stores and 3 percent back on gas. As a person who both eats and drives, this was right up my alley. It’s also the only card I have that charges an annual fee, but when you do the math, you find out that you don’t have to spend that much to profit from the card, even with the annual fee.

Save up for big purchases, and then charge them to your card

Just as sweet sign-up bonuses are an easy way to score a lot of points fast (you can get up to $200 cash or $625 in travel when you open and use a new card), so is putting large purchases on your rewards card.

Young people are notoriously credit-shy, and might wonder why they should even bother with credit at all when they can just pay with debit, cash, or a check?

Easy: By charging it, then immediately paying it off, you incur no interest and instead earn a small, if not insignificant reward. Win-win!

For example, I just bought a new iPhone. I already had the cash (thanks, Digit), but I still put the phone on my Chase Freedom Flex℠. If I had just gotten the standard 1% cash back on the $525 purchase, that would have added $5.25 to my rewards account, which is nothing to sniff at, but also nothing amazing.

However, I also bought the phone via Shop through Chase, a part of Chase Ultimate Rewards®. By getting to the Apple website via the Chase website, I got an additional 2% cash back, tripling my original rewards. Other retailers, like J.Crew, the Gap, Sephora, and Nike are also Shop through Chase partners.

The additional rewards rate varies wildly among different vendors, from a measly 1 percent extra (which nonetheless doubles your return) to as high as 10%. All you have to do is go into your Chase Ultimate Rewards® account, click on “Shop through Chase” and click through the options.

Read more: Compare top Chase credit cards

Be patient, be deliberate, and do the math before you buy

Shortly after buying my phone, I was eyeing another purchase: a new pannier for my bike.

Looking on Shop through Chase, I saw that eBags offered a very nice 8% cash back in addition to Chase Freedom Flex℠’s standard 1% cash back, for a total of 9%. On a $65 purchase, that’d get me almost $6 in rewards, and all for just buying a bag I would have bought anyway. (For comparison purposes, I have more than $4,000 in a high-yield savings account, and they pay me roughly $2 a month in interest.)

However, the price on eBags was about $15 higher than it was on Amazon. Even with the rewards “discount,” I’d still be paying more, and without the benefit of two-day shipping. And if I bought on Amazon, I’d use my Amazon Visa, which would get me 3% cash back.

But I still really wanted that 9%, just on principle. So I waited.

I then noticed that my American Express card was also running an eBags promotion: If I spent $75, I’d get a $15 statement credit, which would knock the price of the bag to below even Amazon’s price point. But when I went back to eBags, the price was still higher than Amazon, but not quite high enough for the American Express promo. I searched for something small that might put me just over the $75 threshold, but found nothing I wanted.

This story has a happy ending: resigned to buying on Amazon for the lower price but also lower rewards I checked the eBags website via Shop Through Chase one more time (just in case), and the price was now in line with Amazon’s. That precious 9% was mine.

Remember all rewards are deliberate incentives to spend

Shop through Chase exists (along with its extra points sweeteners) to get you to buy things you might not buy, or that you might buy elsewhere. (Ditto the American Express promo.) It’s like those emails you get about one-day sales or special time-sensitive discounts: they create a false sense of urgency, this idea that you are somehow missing out by not buying something you had never meant to buy at all.

It taps into something deep in human psychology, and it’s hard to resist. But, for the sake of your sanity and financial well-being, you’ve got to try.

One thing programs like Shop through Chase can do, however, is make you think a little harder about your purchase, just by adding a few steps to the buying process: you’ve got to log in, go to Chase Ultimate Rewards®, find your store, click the link to take you to the actual website, and then complete your purchase as you normally would. That’s about five extra opportunities to reconsider.

Pay off big purchases immediately

No matter how you make your purchase, you should pay it off immediately. When I put a big purchase on one of my cards, I pay if off as soon as the charge officially clears. Since I use the Chase Freedom Flex℠ for everyday expenses (especially now that there are so many cash back opportunities including 5% cash back on travel purchases when you book through Chase Ultimate Rewards®, 3% cash back on dining, takeout, and drug store purchases, and unlimited 1% cash back on all other purchases) I don’t want a large purchase to linger, as it’d throw off my sense of how much I have left to spend in a given week or month.

Also, the longer I wait, the harder it usually becomes to part with that money from my account. Paying if off ASAP reinforces the idea that the money is already spent, and thus needs to be gone.

Forget about your checking account balance

Once you start using credit for day-to-day purchases, your checking account balance will become more and more irrelevant. It will simply no longer serve as an easy indicator of your overall flushness, because so much of the money sitting in it is already spent, if not yet actually gone.

Since I started using credit cards as my primary spending vehicle, my checking account has become nothing more than a weigh station for my money. There’s a certain amount that just sits there (my bank account buffer™) just in case, and the rest of it pauses there briefly before getting transferred to savings or used to pay off my credit card bills.

I find that it’s best to go to an almost entirely credit-based system, rather than mix and match with debit cards. (For one, debit cards have a number of disadvantages.) During grad school, I switched to using my credit card for much of my spending but also continued to use my debit card or cash. I didn’t pay close enough attention to the balance I was racking up and got an ugly surprise when my statement arrived.

Tools like Personal Capital offer an easy way to get a sense of how much you’re spending across several accounts. That’s the number you should focus on.

Be deliberate about what you want to do with the money

Maybe you just want to use your rewards as a little extra spending money, a way to buy a couple of books or an album every now and then. That’s fine. But setting a goal for that money can help you stay on track—you’re less likely to overspend if you know that overspending will render your rewards moot, as they’ll like have to be used to pay off your balance.

For instance, I am using all my rewards dollars towards Christmas this year. I opt for the cash back option, and deposit my rewards (usually in $30-$50 increments) into one of my Capital One 360 savings accounts. (Or for cards that only offer a statement credit, I redeem that credit, and put the money I would have used to pay off my bill into savings.) Then that money can earn (admittedly paltry) interest, rather than languish in abstraction (not yet truly being money, but rather just the possibility of money) in my rewards account.

You could use it to help top off your emergency fund, or use it to defray the costs of an upcoming vacation. It could just get socked away into a fun fund, there to be used when the occasion warrants. But having a specific goal – any goal – can keep you focused.

Summary

Rewards cards can be a (relatively) easy way to earn free airfare or cash back; if not used carefully, they can drag you into debt. If you’re deliberate about both your spending and what you want to do with your rewards, it’ll be easier to resist your own worst impulses and come out ahead.

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About the author

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Lauren Barret is a staff writer at Money Under 30. She has an MFA in creative writing from The Ohio State University, and a BA from Kenyon College. She lives in Portland, Maine.