There are always a lot of rewards credit cards available, but figuring out which one is best for you can take some time.

And why stick to just one if you can combine them to increase your net rewards?

You can choose to use one card for one type of purchases and a completely different one for other types of purchases.

Sounds complicated, right? So why do it?

Because different cards often offer different rates of return for each spending category. By splitting your spending intelligently you are maximizing your rewards by taking advantage of increased rewards on all your purchases – not just some of them.

Knowing your spending habits, timing your application and negotiating to waive the annual fee are all ways you can maximize your rewards.

Read more below to see how you can get the most for your money.

1. Make your payments on time

Credit cards are great for earning rewards, but the rewards are quickly cancelled out if you are paying a high interest rate on the balance.

The first step in earning rewards is to always pay off the full balance each month.

If you aren’t able to pay off the balance, you shouldn’t use a credit card because the interest on the outstanding balance can be astronomical.

Related: Best 0% Balance Transfer Credit Card Offers For Canadians

One easy way to make sure your balance gets paid off every month is to have it come out of your bank account automatically at the end of each billing cycle. That way you’ll never forget to pay on time again.

Just make sure you still check your statements every month for possible errors or fraudulent transactions and to stay on top of your finances.

As with any purchase, you should only buy what you can afford and keep credit card rewards in perspective – they may give you 2% back on your purchase, but…

You’re responsible for the other 98%.

2. Know your spending

A simple and effective way to make sure you maximize your rewards is by knowing your own spending – and using it to your advantage.

You can use a spending calculator, but knowing your spending habits could tell whether those estimates on rewards are realistic.

Sometimes they are and you can earn those rewards (and more), but often times they’re not.

Look at past transactions

If you have a credit card now you can easily look at your transactions for the past few months.

You’ll want to get a good idea of how much you spend on basic categories like:

  • gas,
  • groceries,
  • recurring bills,
  • restaurants, and
  • travel.

Even if you don’t have a credit card you can look at your bank statements to see how much you spend in each category.

Why? Because different cards offer different rewards for certain spending categories.

Personally I spend about $550 per month on gas and groceries, which is enough to justify using the Scotiabank Momentum Visa Infinite card.

This card pays 4% cash back on all gas and grocery purchases, but also comes with a $99 annual fee. You’d need to spend at least $206 per month on gas and groceries in order to break even with the annual fee. Or you can take your savings a step further and negotiate to have your annual fee waived, which is something I do annually (more below).

Combining multiple cards to max rewards

Once you have a good idea of your spending…

Then you can maximize your rewards by using different cards for different purposes.

For example, I use my Scotiabank card for all gas and grocery purchases to get 4% cash back every year. I also use the Capital One Aspire Travel World Mastercard which pays 2% for everything else.

This means I’ll be getting at least 2% back on all my spending, and by using both cards together I maximize the amount I will get back.

You’ll want to make sure you maximize your spending in the categories that offer the highest return whenever possible.

For example, my Scotiabank card gives 4% cash back on all gas and grocery purchases. Instead of buying a laptop at an electronics store such as Best Buy and only earning 2% (using my Capital One card), I buy Best Buy gift cards at the grocery store to get 4% back on my laptop purchase.

It’s one extra step to take – but the extra 2% I earn can add up fast. Especially when making large purchases.

The bottom line: Whatever card you use, funnel as much of your spending as possible into the spending categories that offer the highest return.

3. Making large purchases

I try to put any purchase over $50 on credit and am careful to always pay off the balance at the end of each month.

This means almost all spending gets funneled through my cards – including large purchases. Some of the more significant purchases I’ve made:

  • monthly utility bill,
  • annual insurance (paid in one lump sum),
  • all healthcare spending,
  • all household spending including renovations and furniture, as well as…
  • all travel.

Consumer protection

Another benefit of putting large purchases on your credit card is that it allows you to have some consumer protection when you buy something.

Depending on the card you have some cards offer extended warranties on certain items as well as travel insurance when you pay for travel costs with your credit card.

As well, some cards even give price drop protection so that if the price of the item you bought drops within 90 days (or more with some cards) you can be reimbursed for the difference.

The bottom line: Probably the simplest way to maximize your rewards (no matter which card you choose) is to put all significant purchases on your credit card.

4. Time your application

Depending on when you apply for a credit card you might get a signup bonus.

Depending on the card, a signup bonus might include an account credit or no annual fee for the first year.

When I got my Scotiabank card the annual fee was waived for the first year, which was good enough for me to give it a try. My Capital One card included a lucrative $350 signup bonus. Even with the annual fee of $120 this was enough for me to sign up.

If you need a card, consider waiting until the card you have in mind offers a signup bonus, as they tend to be offered periodically throughout the year.

The bottom line: As a rule of thumb, always look for an incentive to apply for a card and if there isn’t one, either wait for one or consider alternative cards.

5. Annual Fees

Almost all premium rewards cards come with an annual fee.

But did you know you can negotiate to have your annual fee waived?

Every year I have the same conversation with my credit card company about having the annual fee waived. It means more money in my pocket and maximizes my return.

Here are a few things to keep in mind when negotiating to have your annual fee waived:

  • Mention that you are a long standing customer (the longer, the better) – and that you pay your bill every month with no issues. The credit card company makes money off every transaction you make, so they have an incentive to keep you happy.
  • Do some quick research on other cards being offered right now that either offer a signup bonus or have no annual fee – and don’t be afraid to mention this.
  • Just ask. You won’t get your annual fee waived unless you explicitly ask for it. The worst they can say is no.

The ability to have your annual fee waived is something to keep in mind when reviewing which credit card interests you.

Final pointer: Keep in mind that not all annual fees can be waived. If your card offers hundreds of dollars in rewards annually and also has a hefty annual fee, there is less of a chance you’d be able to get the fee waived – but they might throw in a small rewards bonus to keep you happy.