Use the encoder library. That will use interrupts when available. On most Arduinos, that means putting at least one of the encoder lines on pin 2 or 3 (which you already have.)
Under many circumstances, bouncing is not a problem. Bounces just look like flipping the knob back and forth really quickly and when the bounces settle, the position reported by the library is equal to the actual position. If it is a problem then a tiny capacitor like 10pF between each encoder line and ground may help.