How to Integrate Rewards Credit Cards into Your Spending Plan

Credit cards often get a bad rap. In fact, with the right approach, you can integrate rewards credit cards into your spending plan.

I love my rewards credit cards. I use them every day to build toward what I want in life, getting the most bang for every buck I spend. In fact, I can usually send my son to see his dad for free, and I often get to stay for free in hotels, using rewards points.

How do I earn all of these rewards? Well, I do it through my efforts to integrate rewards cards into my spending plan. Here's how you can use credit card rewards in your own life.

Figure out what matters to you

The first step is figuring out what you want. Look at your values and priorities. Be clear about what matters most to you.

Once you have that figured out, make a spending plan based on your short-term and long-term goals. My priorities are few and straightforward:

• Contribute to my Roth IRA
• Contribute to my HSA
• Make charitable donations
• Pay my bills and cover the necessities of life
• Continue to build my long-term emergency fund
• Enjoy experiences

I know what I want from life, and what matters most to me. I make sure my priorities are taken care of, and I integrate rewards credit cards into my daily spending to make it happen.

If you're interested in getting step-by-step help in determining your financial priorities, I offer a mini-course for $2.99. You can use that to clarify your priorities and make a better spending plan.

Use rewards credit cards compatible with your goals

Once you know what matters to you, it's time to integrate rewards credit cards into your plan. If your biggest interest is cash back, get a cashback card. 

I use travel rewards credit cards because that's what matters most to me. I love going on trips, and if paying for rent, groceries, gas, and other regular expenses with a credit card can help me save money on my next out-of-town experience, I'm all for it. These are things I would spend money on anyway, so I get more bang for my buck every time I make a purchase.

You can also look into other programs that can help you maximize the rewards you desire. For example, some credit cards come with travel portals. You get extra rewards when you spend on travel and your points are “worth” more when you book through the portal. Credit cards are a major part of how I save money on travel.

Stack your rewards

Another thing I do when using rewards credit cards as part of my daily spending is stacking. I have browser extensions for Rakuten and Swagbucks, as well as other programs. When I shop online, these extensions often kick in. This happens when I book travel as well. I make it a point to book travel when I can get extra rewards and points on top of what I'm getting with the credit card.

Integrating my rewards credit cards into this personal economy is a big part of how everyday, planned purchases translate into bigger savings.

Don't go overboard with your spending

Be careful when you integrate rewards credit cards into your spending plan. You don't want to go overboard and end up with unmanageable debt.

Make sure that you buy everyday things that are already in your budget. As you go along, pay off your balances and avoid using the rewards as an excuse to spend beyond your means. The key ingredient in making this work effectively is to pay off your balance each month. Otherwise, you'll pay hefty interest fees that will offset any rewards you receive.

With a good plan, it's possible to use rewards credit cards in your spending plan and benefit—without paying interest.