Credit card rewards can make paying off debt easier, but only if you know how to use them wisely. Here are some ways to help you maximize your cash-back benefits and speed up your debt payoff timetable.

Start by assessing your spending habits and finding a card with the best cash-back categories for your needs. Then, stick to your budget and pay down debt.

Pay More Than the Minimum Due

There are several ways consumers can optimize their cash back rewards to pay off debt faster, and most of them don’t require a lot of additional work. One of the most basic strategies is simply paying more than the minimum payment each month, saving a significant amount of money in interest charges over time.

Another way to pay down debt faster is to commit to avoiding new debt unless necessary and use credit cards with low or zero introductory interest rates for balance transfers of existing debt. The card companies that offer these balance transfer promotions usually include debt incentives, like cash-back or discounts, to attract new customers and help them get out of debt more quickly.

Many credit cards also allow people to redeem their cash-back rewards for a statement credit to pay off debt, which can be an excellent way to reduce the overall cost of a credit card balance. This method can help people avoid interest charges if they do their homework and plan accordingly.

For example, they can make a list of their debts in order of size and use the cash back they earn to pay off the highest-interest debt first. Then, they can move on to the next debt and repeat the process until all their outstanding debts are paid off. This strategy can help them feel accomplished and motivated to keep going, as they see early “wins” of paying off their debt.

Automate Your Payments

Many credit card issuers allow you to redeem your cash back for a statement credit or a paper check that can be mailed to you or deposited directly into your bank account. Some cards also offer special promotions that let you earn even more cash back for specific purchases.

To take full advantage of your cash-back rewards, you should set up automatic payments to pay at least the minimum due on your card each month. This way, you can ensure your card balance is always paid off and avoid late payments that could damage your credit score and incur additional fees or penalties.

You should set up automatic payments to pay more than the minimum due. This allows you to progress toward your debt payoff goals without thinking about it and may inspire you to keep going. Whether you choose to automate your payments to a fixed amount or pay more than the minimum each month, you’ll need to create a cushion in your checking account for the days when your paycheck doesn’t cover all your expenses and bills.

The more you can automatically deposit into your savings account and pay down debt with the snowball or avalanche method, the quicker you’ll be able to save money and build your credit score. And, of course, the more you can earn in cash-back rewards, the better!

Redeem for a Statement Credit

Credit card rewards programs generally allow you to redeem for a statement credit, reducing your account’s balance. This can be a great way to reduce debt or free up cash in your budget for other purposes.

However, you’ll want to be aware of any minimum redemption amounts and any terms and conditions that may impact the value of your rewards when choosing how to spend them. For example, some cards require a minimum amount to redeem for cash, and others limit the number of times you can do so in a given period. Additionally, some cards have expiration dates on their rewards, and you’ll want to be mindful of those if your plan includes applying rewards to a balance.

Some card issuers also offer other ways to redeem your rewards, such as a check or a deposit into your bank account with the card issuer. This can provide a different value than using them to pay off your debt, but it depends on how the cards you use are set up.

It’s important to seek a cash-back credit card that matches your spending habits. Some cards offer a higher percentage of cash back for certain categories, such as groceries and gas. If you’re planning to make a large purchase, such as a home, car, or appliance, consider a card offering a lower cash back rate in those categories.

Use the Snowball or Avalanche Method

There are a few debt repayment strategies that have gained popularity. One is known as the snowball method, and another is the avalanche method. Each has pros and cons, so consider which might work best for your goals.

With the snowball method, you pay your minimum payments on all your debts, then allocate any extra cash toward paying down the smallest balance first. The strategy builds momentum as you see the debt shrink, and you get a sense of accomplishment from each payment. It’s a good option for self-motivated people who enjoy seeing quick wins.

On the other hand, the avalanche method involves listing all of your debts and their associated interest rates, then focusing on paying off your highest-rate debts first. Once the smallest debt on your list is paid off, you’ll move to the next highest-rate debt. This approach may be less gratifying, especially if your highest-rate debts are also among the largest balances that you owe.

However, the avalanche method can save you hundreds, if not thousands, of dollars in interest charges over time. It’s a good choice if you have high-interest debt, like credit card debt, that charges double-digit interest rates, which can add up quickly.