This self-made millionaire avoids using multiple credit cards and collecting points: "There's a point where the benefits of accumulating points diminish."

Responsible credit card usage can result in various benefits, including store discounts and airline miles.

Ramit Sethi, a self-made millionaire, does not participate in the credit card points game despite some people spending hours strategizing to earn rewards.

"He tells CNBC Make It that there comes a time when it's diminishing returns. The goal of his life is not to maximize credit card rewards, but to live a rich life."

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

"Simplicity is one of my core values," he declares. "I keep a limited number of credit cards to avoid confusion and make it easier to manage my finances."

Sethi uses two credit cards for his personal expenses: one that offers travel rewards and one that offers cash back. He determined that these cards were sufficient for him after analyzing his spending habits.

Sethi claims that he utilizes his cards only for expenses that he is confident he can settle each month.

Don't go into credit card debt for points

Avoid accumulating credit card debt to earn points, advises Ted Rossman, Bankrate's senior industry analyst, regardless of the potential reward.

"If you want credit card rewards to work for you, you must pay in full and avoid interest, advises CNBC Make It. However, if you carry a balance, you could end up paying significantly more in interest over time."

The average interest rate for new credit card offers increased to 22.89% in the first quarter of 2024, according to WalletHub's Credit Card Landscape report.

Before accepting a new offer with numerous rewards, consider if you can pay off your balance monthly to avoid interest fees, advises Rossman.

The opportunity cost of chasing credit card rewards

How much time are you willing to commit to optimizing your rewards?

"Sethi remarks that while it's enjoyable to receive a free trip to Hawaii or a hotel upgrade, spending a lot of time concentrating on credit card rewards diverts attention from significant issues that require more attention, such as financial planning and saving for the future."

Sethi suggests creating a "conscious spending plan" for funding your next vacation, which entails dividing your money into four categories.

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

Sethi advises prioritizing financial obligations while also allocating funds for self-indulgence.

"The ideal points game is to have the flexibility to pay for anything, anytime, in any way," he remarks.

To become a successful and confident communicator, enroll in CNBC's online course, "Become an Effective Communicator: Master Public Speaking." Our program will teach you how to speak clearly and confidently, manage your nerves, choose the right words, and use effective body language to make a great first impression. Register now and use code EARLYBIRD for a 30% discount through July 10, 2024.

Sign up for CNBC Make It's newsletter to receive tips and tricks for success at work, with money and in life.