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How to manage multiple credit cards

Here's how to manage multiple credit cards so you can get the most value out of paying with credit cards.

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The average American has four credit cards and you may have more. It's not uncommon for credit card optimizers to have multiple cards, totaling 10 or even 35, to get the most rewards and benefits.

After all, it's practically impossible to find one card that offers all the perks you're looking for. There are category-specific cards that can pair nicely with each other and allow you to earn the most rewards in key spending categories, such as gas, groceries, dining and travel. And with multiple cards you can take advantage of various travel insurances and annual statement credits.

The more credit cards you have, the more work that's required to manage them. You'll need to track multiple balances, due dates, fees and rewards to get the most value out of having several credit cards.

Below, CNBC Select reviews how to manage multiple credit cards so you can enjoy optimizing all the benefits.

How to manage multiple credit cards

  • Keep track of terms
  • Pay on time and in full
  • Know when to use each card
  • Reconsider annual fees

Keep track of terms

Each card has a separate set of terms and conditions that you'll need to know. For instance, if you have five cards, you'll also have five credit limits, balances, due dates, interest rates and more.

You should familiarize yourself with the terms of each card so you don't miss a payment or max out your card. And you'll want to pay close attention to any cards with special financing offers, so you don't end up carrying a balance on a high interest card thinking it's a 0% APR card.

Pay on time and in full

Payment history is the most important factor of your credit score, so it's key to always make at least your minimum payment on time. It's also important to pay off your bill in full to avoid interest fees. The one exception to paying in full is if you're taking advantage of an intro 0% APR period, but even then, you should have a debt pay-off plan to ensure you have no balance when the interest-free period ends.

Here are some tips to help you pay on time and in full:

  • Set up autopay: A convenient way to ensure payments are always made on time is to set up autopay. Even if you prefer to manually make bill payments, set up autopay as a safety net.
  • Set reminders: Credit card issuers allow you to set up payment reminders for when your statement is ready, when your bill is due within a certain number of days and when a payment posts to your account. You can also create reminders on your phone or in your personal calendar.
  • Change due dates: If your bill's due date isn't ideal, you can likely change it. Most card issuers let you move the due date to when it works best for you, such as pay day. If you have multiple cards from the same issuer, consider making the due dates the same so you only have to login to make a payment once a month.

Know when to use each card

If you have multiple cards with various rewards rates, it can get confusing when to use each card. To make your life easier, have a note on your phone with the rewards rates of each card so you can check it as needed. Or you can add labels to each card that say "gas" or "dining."

Knowing which card to use is key to maximizing rewards. For example, let's say you have the Blue Cash Preferred® Card from American Express and the American Express® Gold Card. Both cards offer high rewards rates on grocery expenses:

  • Blue Cash Preferred® Card from American Express: 6% cash back at U.S. supermarkets on up to $6,000 per year in purchases (then 1%)
  • American Express® Gold Card: 4X Membership Rewards® points at U.S. supermarkets (on up to $25,000 per year in purchases, then 1X)

The best card for groceries is the Blue Cash Preferred Card since you earn more rewards. If you spend $4,000 at U.S. supermarkets each year, the Blue Cash Preferred Card would earn you $240. The Amex Gold Card would earn you $160. Using the wrong card could cost you $80 in rewards.

Another thing to watch out for is foreign transaction fees. When you travel outside the U.S., stick to using a card that doesn't ding you for purchases made abroad. If you have both the Chase Sapphire Preferred® and the Chase Freedom Unlimited® Card, for example, you'll want to use the Sapphire Preferred on your overseas trip. If you charge $1,000 to the Chase Freedom Unlimited® Card, which has a 3% foreign transaction fee, you'll incur $30 in fees versus nothing with the Sapphire Preferred.

Reconsider annual fees

If you have credit cards with annual fees, you should regularly evaluate whether the fee is worthwhile. Just because an annual fee card made sense when you opened it, that doesn't mean it provides long-term value.

Your spending habits and cash flow can change over time, making it important to reconsider the fee. Plus, a card issuer can increase the annual fee, like the Chase did with the Chase Sapphire Reserve® earlier this year, which made many cardholders question the card's worth.

Learn more: Chase Sapphire Reserve increases annual fee to $550—is the card still worth the cost?

It's important to do the math to see if the annual fee still makes sense for you before it renews on your cardmember anniversary. (Here's how I did the math for my Chase Sapphire Reserve card.)

If you calculate that the annual fee is no longer worthwhile, consider calling customer service and asking for the retention department to see if they'll waive the annual fee or provide cash back to offset it.

And if that doesn't work, consider downgrading your card to a no annual fee alternative. As a last resort, you can cancel the card. It will bring down your credit score a little bit, but as long as you're not planning on taking out a car loan or applying for a mortgage, it should be OK. You can always use CreditWise from Capital One, which offers a credit score simulator to see how certain actions — such as canceling a card — might impact your credit score.

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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.