Image: woman swiping a credit card © Rubberball, Mike Kemp, Rubberball, Getty Images

Conventional wisdom says you should try to get 1% or 2% returns from your rewards credit cards. Air traffic controller Sam Ackland, 25, would feel like a slacker if he settled for that.

Ackland says he gets at least 4% back on every credit card purchase and often gets more, using six different cards plus a couple of online malls.

“I try to get 7% cash back average per year,” said Ackland, who lives in New York.  “I spend about $40,000 on credit card purchases. Forty thousand times 7 percent is $2,800.  Not a bad Christmas bonus every year!”

Ackland is among a cadre of serious rewards card enthusiasts who pride themselves on making the most of their points. They scour websites for new offers, trade tips with other reward virtuosos and carry wallets fat with plastic so they can deploy the right card at the right time.

You don’t need quite that level of dedication to get more from your rewards cards. Just taking a few pointers from these reward champions could dramatically improve your return.

“Getting rewards can be a complicated game, but at the basic level, anyone can play and win,” said Dan Ray, an editor at CreditCards.com. “I feel about credit card rewards the same way I do about not taking your boss's matching contribution in a 401k, or walking away from a poker game leaving your chips on the table: It's free money, people. Take it.”

To cash in like these credit card ninjas, you must:

  • Never carry a credit card balance. The math doesn’t work if you pay any interest on your purchases.
  • Have a great FICO credit score. The best rewards card offers are typically reserved for those with FICOs of 750 and above.
  • Spend, but with discipline. Ninjas typically put all or most of their monthly expenses, including rent, utilities and groceries, on their cards. But they warn against using a card if you have to pay a surcharge that wipes out the reward or if you’re spending just to get the points. “A common mistake that reward cardholders make is they get caught up in the excitement of earning rewards on everything they spend,” said Bill Hardekopf of LowCards.com, “which sometimes can lead to spending too much on their cards.”
  • Research constantly. CreditCardForum and the credit card recommendations at MyFico are two sites that can tip you off to special offers and new techniques for earning and using points.Sites dedicated to maximizing rewards include The Points Guy, Flyertalk.com, Milepoint and Frequent Flyer University, among others. Deal sites such as Dealnews, Slickdeals and FatWallet.com also can alert you to some of the bigger promotions. Deal sites such as dealnews.com, Slickdeals and FatWallet also can alert you to some of the bigger promotions.

It’s just as important to find the best way to redeem points, several rewards ninjas said. That often means exploring different options and doing some math.

“Sometimes (the most lucrative reward) is in the form of a statement credit,” said Gabriel L. Best II, a 32-year-old financial services supervisor in Nashville.  “Sometimes that means I need to redeem them for airline miles. Many times that means I should redeem them for gift cards to popular retailers and restaurants.”

Maximizing rewards may take more than one step. Engineer Arvind Kulkarni, 56, uses his Chase Freedom card to earn 5% rewards in different “bonus” categories that change every three months. Then he transfers the points to his Chase Sapphire Preferred account, which offers a 25% bonus on airline tickets booked via its Ultimate Rewards site.

“This means you can buy a $500 ticket from $400 rewards accumulated,” Kulkarni said. A 25% bonus on 5% means an effective yield of 6.25%, he said.

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Some ways to earn bonus points aren’t well advertised. Michael Dolen, the founder of CreditCardForum, discovered he could earn an extra 10 points plus a 10% bonus on every purchase with his Chase Freedom card because he had a Chase bank account.

“So I've been using the card for hundreds of tiny transactions each month, which nets me around 7-10% on that account,” Dolen said. Dolen then transfers the points to his Sapphire Preferred card, which lets him transfer them again into frequent flier programs that give him one mile for every point.

Some other ninja tips:

Look for big sign-up bonuses. Best received a sign-up bonus of 25,000 points after spending $1,000 in the first three months using a new PenFed Platinum Rewards Visa. Brian Kelly, the founder of The Points Guy, highlights current hot deals, such as a 40,000 point bonus when you spend $3,000 within the first three months on a new Chase Sapphire Preferred card.


Pay attention to bonus categories. Ninjas tend to like the cards that offer 5% back in certain categories, such as grocery, drugstore or gas pump purchases. Sometimes the categories rotate every three months.  “Keeping track of the rewards programs is pretty easy with online account access,” Ackland said. “If you forget what card is 5% on what category, it is just a click away.”  Since these cards usually offer just 1% back on other purchases, however, Dolen recommends you use a different card for those, one that offers 2% back.

Sign up for the emails. Most rewards program offers short-lived promotions that can help you pile up extra points or redeem them in advantageous ways. Always read the fine print, though. “For example, do ‘grocery stores’ include Whole Foods? Or just the plain vanilla supermarkets like Vons and Kroger?” Dolen said. “The answer may vary depending on the card. Often times, the ‘gas station’ category only applies to purchases made at the pump, not those made inside.”

Deploy gift cards. This technique can be controversial. Many rewards programs say they don’t offer points on the purchase of “cash equivalents” such as gift cards. Rewards ninjas have discovered, though, that gift cards purchased at grocery stores or drugstores can circumvent that rule.

Ackland buys gift cards for various merchants from local grocery or drugstores when one of his cards offers 5% on grocery or drugstore purchases.

“Grocery stores and drugstores also sell $500 gift cards from Visa, MasterCard and American Express, which is the secret to getting at least 4% on everything,” Ackland explained. “Any purchase that doesn't fall under a rewards category and I can't buy a merchant gift card for it gets paid for with a (Visa) gift card.”

The Visa gift cards come with a $4.95 fee, but with 5% cash back on a $504.95 gift card purchase, Ackland still earns a 4.06% return.

“This way you never get less than 4% on anything,” Ackland explained.

Use online malls. These sites are basically portals that offer rewards bonuses if you start your online shopping there. If you’re going to use your Discover card to shop at jcpenney.com, for example, you can earn 5% cash back on your purchase if you first log into the ShopDiscover online mall and then click through to the J.C. Penney site.

If all this seems like too much effort, Ben Woolsey of CreditCards.com recommends that you concentrate your spending on one good rewards card to maximize your earnings. But the ninjas insist the extra effort they expend is worthwhile.

“Most people think it’s too confusing and time-consuming to keep track of everything,” Ackland said, “but it really isn't once you get the hang of it.” 

Liz Weston is the Web's most-read personal-finance writer. She is the author of several books, most recently "The 10 Commandments of Money: Survive and Thrive in the New Economy" (find it on Bing). Weston's award-winning columns appear every Monday and Thursday, exclusively on MSN Money. Join the conversation and send in your financial questions on Liz Weston's Facebook fan page.

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