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This money coach swears this 1 question keeps her from spending too much on her credit card

Money coach Kara Perez, founder of Bravely, explains how she avoids overspending when using her credit card.

Photo courtesy of Kara Perez

In 2017, Kara Perez founded Bravely, a personal finance community that shares knowledge and tools for self-identified women. On the site, Perez talks about money a lot, whether the conversations are about credit cards, debt or savings.

She's gathered a lot of good advice along the way, but the best piece of credit card advice came from a friend during casual conversation. When considering whether to get a new credit card, Perez's friend asked her: "Will you actually use the rewards?"

It seems simple, but it stuck with Perez.

"So often we think of credit card rewards as something we need to chase, " she tells CNBC Select. "But if we never actually use them, it could mean we overspent or paid an unnecessary fee for no reason."

Below, we learn more about how this simple guiding question helps Perez feel good about her credit card choice, even while others opt for premium cards with high fees and potentially lucrative rewards.

Why Perez only has one credit card

When it comes to credit cards, Perez keeps it simple: She uses one no-annual-fee credit card and doesn't feel the need to apply for any other cards with additional bells and whistles. 

"It fits my needs perfectly," says Perez, who doesn't like to spend a lot of time juggling lots of cards or "travel hacking"  — i.e. using a combination of welcome bonuses, airline miles and hotel points from several travel rewards cards at once to cash in on free vacations.

"Review your credit cards and see if you're actually taking advantage of all the perks," she advises. You may find out you aren't using them as much as you thought you would.

How to decide if your rewards card is costing you too much

While travel rewards can be a good tool for the adventurous cardholder, Perez is skeptical whether "free" vacations can count as such if you've been spending beyond your means in order to earn enough points.

If you're overspending in order to earn a big sign-up bonus, or if you're actually paying more on a high annual fee than you're earning in rewards, it's probably time to rethink your credit cards. (Read about how to find out if your premium travel card is still worth the high annual fee.)

And at the same time, if you don't actually care very much about traveling, then you should definitely not pay for a travel card just because other people say it's a good idea.

This especially rings true today: "Now that we're living in the Covid world, does it make sense to have a travel heavy card? Asking these questions is a good practice to get into," argues Perez.

Downgrading your card to save on annual fees

One option for saving money on your credit card is to downgrade it to a no-annual-fee card, or at least one with a lower fee. Card issuers usually require that you've kept your account open for a year before requesting a downgrade. 

For example, one of the most popular travel rewards cards, the Chase Sapphire Reserve® Card, has a steep $550 annual fee. You could downgrade to the Chase Sapphire Preferred® Card, with a $95 annual fee, or one of Chase's two no-fee cash-back cards, the Chase Freedom Unlimited® Card or the Chase Freedom® Card

Before you downgrade, take these steps:

  1. Decide if the rewards are worth the costs.
  2. Find a comparable card from the same issuer.
  3. Call your card issuer and request a downgrade.
  4. Review your account for changes.

Learn more: Read our full step-by-step guide on how to downgrade your annual-fee credit card.

Bottom line

Before Perez received this advice from her friend, she didn't think too critically about using a credit card. But now, she's more aware that there are all kinds of fees, perks and rules to look out for.

It's important to be mindful of the cards you have in your wallet. Always make sure that your card is working in your favor, and know that this could change as your life evolves.

"I use the one that works for my life now," says Perez. "If my life changes, I know I can get a card to fit it better then."

Information about the Chase Freedom® Card has been collected independently by CNBC and has not been reviewed or provided by the issuer of the card prior to publication.

Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the CNBC Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.