I have 26 credit cards. Here's the best advice I can give you to maximise your rewards

Personal Finance Insider writes about products, strategies, and tips to help you make smart decisions with your money. Business Insider may receive a commission from The Points Guy Affiliate Network, but our reporting and recommendations are always independent and objective.

Credit cards Holly Johnson BahamasCourtesy of Holly Johnson.Holly Johnson, who maximizes credit card rewards from 26 cards.

Currently, my husband and I (and our businesses) have 26 different credit cards to our names. We’ve had as many as 40 at one time in the past, but we’ve cancelled some and taken it easy on new card sign-ups the last 24 months.

I know that sounds crazy, and it probably is, but I like having a bunch of different cards that meet different needs. I keep some credit cards for perks like trip cancellation and interruption insurance, primary auto rental coverage, or cell phone replacement coverage. Other cards I use regularly to rack up hundreds of thousands of rewards points every year.

Over the last 18 months, I’ve earned over 1 million points and miles I’ve used to travel to destinations all over Europe and the Caribbean – with and without husband and kids. Here are my tips for maximizing rewards when you’re willing to juggle more than one credit card at one time:

Never pay interest on your purchases – no exceptions

A recent analysis of credit card data from the Federal Reserve conducted by Experian revealed that only 45% of consumers with credit cards paid their bills in full each month. That’s a shocking revelation considering the prevalence of rewards credit cards – and the fact that you know at least some of those consumers must be trying to earn points.

Considering the average credit card APR is over 17% and the average rewards credit card gives out 1% to 3% back at most, it’s easy to see how this is a losing proposition.

That’s why I never, ever pay interest on my purchases and suggest you say the same. If you plan to carry a balance, rewards just aren’t worth it.

Beware of annual fees

One problem that comes with juggling multiple rewards cards is the fact that many of the best ones charge annual fees. My favourite credit card, the Chase Sapphire Reserve, has an annual fee of $US450 – and we have two of them!

If you plan to keep multiple cards, it’s crucial to make sure you’re only paying fees when it’s worth it. With the Chase Sapphire Reserve, for example, it’s a no-brainer because we get annual travel credits worth $US300, Priority Pass Select membership, a Global Entry/TSA Precheck credit up to $US100, and 3x points on travel and dining.

I also paid the $US450 annual fees on our Hilton Honours Aspire Card from American Express this year since we get automatic Hilton Diamond status, a free weekend night every year, an annual airline credit up to $US250, an annual resort credit up to $US250, and other perks. I have a few Hilton reservations coming up this year, so we’ll utilise the benefits and get more value than we pay in.

I gladly pay the annual fee on our Ink Business Preferred Credit Card each year as well and the same is true with my Barclaycard Arrival Plus World Elite Mastercard, which I use all the time. The rest of my cards have no annual fee – or, if the benefits don’t outweigh the annual fee, I cancel them once the annual fee comes due.

Use the right card at the right time

To get the most out of your rewards, you need to utilise each card for its respective category bonuses. Any time you can earn more than the average return, you absolutely should.

For me, that means using my Sapphire Reserve for dining and travel, utilising my Hilton Honours Aspire Card from AmEx for Hilton stays, and whipping out my Barclaycard Arrival Plus World Elite Mastercard any time I want to earn a flat 2x miles on any purchase.

I also always take advantage of the 5x earning categories on my Chase Freedom card, which rotate quarterly for up to $US1,500. They just so happen to be grocery stores and home improvement stores this quarter.

Choose programs that let you pool points

I’m a Chase enthusiast to my core, and yes, I have the Chase trifecta: the Sapphire Reserve, Ink Business Preferred Credit Card, and Chase Freedom. Having multiple cards with a program like Chase Ultimate Rewards is always smart because you can utilise bonus categories to earn more rewards and pool all your points with a spouse or partner who lives at your address.

The Chase Ultimate Rewards program even lets you pool points in the account that offers the most value – for example, I pool all our Chase points in my Chase Sapphire Reserve account because I get 50% more travel when I book it through the Chase portal. This account also lets me transfer points to travel partners at a 1:1 ratio, whereas the Chase Freedom does not.

Earn plenty of sign-up and welcome bonuses

My final tip is the one that leaves me with a merry-go-round of credit cards in my wallet. Make sure you’re taking advantage of credit card sign-up and welcome bonuses at least a few times per year!

This is important since sign-up and welcome bonuses can help you earn 50,000 points or more in one fell swoop – and all for meeting a minimum spending requirement.

Opening a few new credit cards per year shouldn’t be a disaster for your credit score provided you are debt-free and making all your payments on-time, so don’t be afraid. Compare credit cards to find ones with the best perks and biggest signup bonuses, then sign up for the ones you love and meet the minimum requirements. Over time, you’ll earn considerably more rewards this way.

Learn more about the credit cards mentioned in this article from Business Insider’s partner, The Points Guy:

The Chase Sapphire Reserve »

The Hilton Honours Aspire Card from AmEx »

The Barclaycard Arrival Plus World Elite Mastercard »

The Chase Freedom card »

The Ink Business Preferred »

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.