Using credit cards responsibly can earn you a number of perks, from store discounts to airline miles.

And although some people may spend hours strategizing ways to rack up rewards points they can swap for those perks, self-made millionaire Ramit Sethi says he chooses not to "play the credit card points game."

"There's a point where it's diminishing returns," he tells CNBC Make It. "The point of my life is not to squeeze out the absolute maximum amount of credit card rewards. The point of it is to live a rich life."

Sethi is the host of the "I Will Teach You To Be Rich" podcast and follows the same personal finance advice he gives to the many couples he interviews: Keep it simple.

"One of my core values is fighting for simplicity," he says. "I have a very small number of credit cards so that I don't have to look at my wallet and remember which card to use for groceries or which one to use for gas or other purchases."

Sethi says he mainly uses two credit cards for his personal expenses: a card that offers travel rewards and a card that offers cash back. After taking a look at his own spending, he figured out that those cards were enough for him since he didn't want to overcomplicate his finances by needing to keep track of multiple credit cards.

Additionally, Sethi says he only uses his cards for expenses he knows he'll be able to pay off each month.

Don't go into credit card debt for points

Regardless of the potential reward, you shouldn't sink yourself into credit card debt in the name of racking up points, says Ted Rossman, Bankrate's senior industry analyst.

"Credit card rewards only work for you if you're able to pay in full and avoid interest," he tells CNBC Make It. "If you're going to carry a balance, you could pay a lot more in interest over the long run."

Credit card interest rates soared to record highs this year. The average interest rate for new credit card offers was 22.89% as of the first quarter of 2024, according to WalletHub's Credit Card Landscape report.

Before you accept a shiny new offer that promises a slew of rewards, ask yourself if you'll be able to clear your balance each month and avoid costly interest charges, Rossman says.

The opportunity cost of chasing credit card rewards

You should also ask yourself how much time you're willing to dedicate to figuring out how to make the most of your rewards.

"It feels great to get a free trip to Hawaii or a hotel upgrade," Sethi says. "But if you spend hours and hours focusing on credit card rewards, you're focusing on $3 questions instead of $30,000 ones."

Instead of relying on points to fund your next vacation, Sethi recommends creating a "conscious spending plan." This strategy involves allocating your money toward four categories:

1. Fixed costs, such as your mortgage, rent or student loan payments
2. Savings, including an emergency fund and money for future vacations or other large purchases
3. Investments, such as your 401(k) or Roth IRA contributions
4. "Guilt-free spending," such as dining out or shopping

This method ensures that you're taking care of your main financial responsibilities first while also setting aside money to treat yourself, Sethi says.

"The best points game is to be able to pay for whatever you want, however you want it, whenever you want," he says.

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