Credit Card Rewards: How to Maximize Cash Back and Points

How credit card rewards work

Cash back vs. points: which is right for you

When comparing cash back credit cards and credit card points programs, the right choice depends on your habits and goals.

Cash Back Cards

Cash back cards are relatively straightforward: You earn a set percentage of money back on qualifying purchases. The rewards usually appear as a statement credit or may be deposited to your account. If you prefer simplicity and flexibility, cash back tends to be the easiest option to see tangible results each month.

Best for: Everyday spending, bill payments and customers who value direct savings.

Credit Card Points

Points programs accumulate rewards you can redeem for travel, merchandise or gift cards. Because redemption values vary, savvy users can stretch their points by redeeming through special promotions or travel partners.

Best for: Frequent travelers and cardholders who enjoy optimizing redemption options.

If you’re deciding between the two, consider how you spend. Groceries, gas and streaming services often earn higher rates with cash back cards, while points-based cards can deliver more value if you frequently book flights or hotels. The Consumer Financial Protection Bureau (CFPB) found that some cardholders lose value due to hidden conditions or devaluation of rewards. Always confirm how points convert to cash or travel before committing to a card.

Tips to maximize credit card rewards

You don’t need to overhaul your budget to earn more rewards—just plan your purchases with purpose. These practical steps can help you maximize credit card rewards while keeping your finances on track.

1. Match your spending to your rewards.

Review your monthly expenses and choose a card that complements them. If groceries and dining are some of your top monthly expenses, pick a card with higher percentages in those categories. For large, one-time purchases, look for introductory bonuses or limited-time offers.

2. Use your card for everyday payments.

Using your rewards card for recurring bills—like cell phone service, subscriptions or utilities—can build rewards faster. Just ensure that you pay your balance in full each month to avoid interest that cancels out your earnings.

3. Take advantage of bonus categories.

Many cards feature credit card bonus categories that change quarterly. Activate them and plan purchases accordingly. For example, a 5% cash back offer on home improvement stores could make that weekend project even more rewarding.

4. Take advantage of special promotions.

Credit card companies often run different short-term promotions or seasonal offers that can boost cash back spending at select companies. It’s worth checking your account dashboard or recent emails for any active deals, especially leading into the holidays. According to the Consumer Financial Protection Bureau (CFPB), some cardholders miss out on rewards because the terms of these offers can be unclear. Always confirm the requirements and timelines before you start spending toward a promotion.

5. Redeem your credit card rewards strategically.

Your rewards are only valuable if you use them. Set a reminder to redeem points or cash back regularly and know your program’s expiration policy. For points cards, compare redemption options—sometimes travel or statement credits provide higher value than merchandise.

6. Avoid interest and fees.

Paying interest or late fees can quickly outweigh the benefits of any rewards program. Set up automatic payments or due-date reminders to ensure you pay on time. Responsible use not only protects your rewards, but it can also improve your credit score.

Responsible credit card use matters

Rewards programs are most effective when paired with strong financial habits. Here’s how to use your card responsibly and protect your credit.

Pay your balances in full.

If possible, you should always pay off your credit card balance in full each month. This eliminates interest charges and keeps your credit utilization low—a key factor in maintaining a healthy credit score. If you find yourself unable to pay off your balance and accumulating interest, review our article to learn how to pay off credit card debt. Responsible repayment does more than save on interest; it actively improves your credit profile. As Credit.org notes, paying on time and keeping balances low are two of the most effective ways to strengthen credit history over time.

Monitor spending through digital banking.

With Associated Bank, it’s easy to track purchases, view spending summaries and set alerts. Regular monitoring of your credit card statement and spending habits helps you stay within budget and identify unauthorized charges early.

Build positive credit history.

Using a rewards card responsibly can demonstrate financial discipline. Over time, consistent on-time payments and low balances may improve your credit standing, opening doors to better rates on future loans.

Stay alert for fraud.

Many credit cards include safeguards such as Zero Liability Protection, which helps ensure you won’t be held responsible for unauthorized transactions. If you ever notice suspicious activity, contact Customer Care immediately—local, live help is available to assist you.

Choosing the right rewards card

With so many options available, selecting the best rewards credit card can feel overwhelming. Focus on these three factors when selecting a card:

1. Your spending categories: Review where your money is spent each month. If gas and groceries are the top category, a flat-rate (i.e. 1.5% cash back) or tiered cash back card may offer better returns.
2. Your lifestyle goals: Frequent travelers may prefer a points or miles program that delivers extra value on flights and hotels, providing more travel opportunities in the future.
3. Local and community benefits: Look for local benefits, such as special promotions or community partnerships that add value beyond rewards.

Comparing cards side-by-side can reveal how rates, annual fees and introductory offers align with your priorities. The best rewards credit card is one that fits your daily life—not just one that offers the highest headline rate. For students or those new to credit, it may help to start with a beginner or student credit card. Yale’s educational resource Understanding Credit Cards explains how starter cards help build credit responsibly before upgrading to premium rewards options.

Redeeming your rewards

When it’s time to enjoy your rewards, you’ll usually have several options:

• Cash Back: Apply as a statement credit or deposit it directly into your checking or savings account.
• Gift Cards: Perfect for special occasions or as simple budgeting tools.
• Travel Rewards: Use points toward flights, hotels or rental cars—sometimes at a higher redemption value.
• Merchandise or Experiences: Browse your card’s online portal for unique redemption opportunities.

The key is to redeem regularly. Letting points or cash back sit unused can lead to expiration or devaluation, especially if your program terms change. A good rule of thumb is to redeem at least once per quarter, so your rewards keep working for you.

Common mistakes to avoid with credit cards

Even experienced cardholders sometimes leave value on the table. Watch for these common missteps:

• Carrying a statement balance: Paying off your statement balance in full should always take priority over rewards, as interest charges will quickly outweigh your cash-back gains.
• Missing due dates: Late payments can reduce your credit score, forfeit promotional rewards and carry other negative consequences.
• Ignoring bonus activations: Many cards require you to activate rotating categories each quarter.
• Over-redeeming for low-value items: Some merchandise redemptions offer less than one cent per point. Compare values before confirming.

By steering clear of these pitfalls, you can make every purchase—and every point—count.

Making your rewards work for you

Credit card rewards aren’t just perks; they’re tools that can be used to enhance your financial well-being. Whether you use cash back credit cards, points cards or a combination, the secret lies in aligning your spending habits with your goals and managing your account wisely.

When used responsibly, a rewards card can complement your overall budget strategy, build credit strength and deliver tangible benefits on everyday purchases.

Start earning more from every purchase

Choosing a credit card is an important financial decision—and a rewarding one when done right. Explore Associated Bank credit card options to find the program that fits your lifestyle and goals.