Credit card strategies for to make the most of your holiday shopping.
‘Tis the season to be spending. While the merriment and cheer of the holidays is ripe for celebration, preparation for the holiday season can often put a strain on your budget. As is often said, “it’s greater to give than receive.”
So why not let your credit card give back to you?
With the right strategy, you can wisely use your credit card to make the most out of every dollar you spend—earning rewards, points, and cash back. Not all credit cards are created equal, so knowing which card to use for your holiday shopping is key to reaping huge savings and bonuses.
Here are four things the experts at CreditCardForum detailed for you to consider as you prepare your holiday shopping strategy.
Rotating-category cards are often particularly holiday-friendly, offering five percent cash back on places holiday shoppers frequent like online retailers and department stores. Consider buying gift cards to use later in the year if you don’t think you’ll maximize your card’s categories.
Credit card shopping portals and card-linked deals programs also reward those who plan ahead. Through these programs, your card’s partner merchants offer discounts or extra cash back beyond what you’d earn in their usual cash-back categories.
From a consumer perspective, there’s no reason not to take advantage of these portals as they take you to the same retail sites as if you went there directly. Now, you simply rack up a bunch of extra points.
If you prefer to physically go to retail stores, the best option may be to buy online and select the in-store pick-up option to keep those points, but receive your merchandise that same day.
To attract new cardholders, issuers will often offer extra points, miles, or cash back when a new customer signs up for their card. These offers are a great way to put extra spending to work since they typically require a fairly large amount to be spent over just a few months, which is likely what you are going to be doing around the holidays anyway.
If you want to use this option for holiday spending, the time to sign up is before the season begins so you can start working toward the bonus. If the whole family is spending more, it may be smart to consider opening up one card per adult in the household to simultaneously work toward two bonuses.
However, be conscientious of your holiday budget. Don’t sign up for every card that boasts extra points or miles. It’s best to decide on a single credit card with a competitive sign-on bonus that is best for you.
If you find a card you are interested in, but do not see a bonus attached, contact the issuer to see if one is in the pipeline. Sometimes calling the issuer to see what special promotions they are offering can land you with more benefits.
Beware of returns with this option. If you return merchandise you bought with this card, that will be deducted from your spending progress toward your bonus. It is best practice to always spend just a couple of hundred dollars more than the minimum requirement to be sure you safely lock in that bonus.
Buying holiday travel, or even travel into the new year, is a great way to rack up rewards. While not necessarily card-related, airline miles programs will often offer extra miles if you spend a certain amount via their shopping portals during the holiday season—for example, you might earn 6,000 miles if you spend $1,250 via the portal.
If you already have copious amounts of credit card rewards heading into the holidays, you can often boost their value when you book plane tickets. American Express, for example, will sometimes make your membership rewards points worth more if you transfer them to a specific travel partner.
Instead of being worth just one mile each, your MR points might be worth 1.25 miles each when you make the transfer. While programs do this year-round, you may notice more of these point-boosting opportunities around the holidays because rewards programs like to get points off their books near the end of the year, benefiting the consumer and those who take advantage.
Extra Perks and Protection
Unknown to many card members, several credit cards offer additional benefits that go beyond their reward and bonus programs, including extended product warranties, price protection, purchase protection, and return guarantees.
Many issuers offer return guarantee where they will refund the purchase price regardless of the merchant’s policy if you submit your claim within the issuer’s timeframe guidelines. With price protection, if you find a lower price for an item you recently purchased, your credit card company may refund the difference up to a specific amount within its allotted time frame as well.
Some credit cards offer extended warranty. When you make a purchase from a retailer, they will often offer you the option to purchase an extended warranty, but if you are aware of your credit card’s policy, you may be able to enjoy similar coverage at no additional cost.
Every issuer offers a guide to benefits that details all of the protection programs it offers and how to submit a claim. Many people do not read or save this information, but you can obtain an electronic version online or contact your issuer directly to request a new one.
It’s important to find the best cards that work for your spending habits during the holiday season and educate yourself on all of the benefit and protection plans each of your cards offer. Using your credit cards responsibly can be more than convenient. With a little planning, you can be a savvy shopper and earn rewards and bonuses while you give.
Ben Woolsey serves as president and general manager of CreditCardForum, the leading online community solely dedicated to credit cards consumers. With an extensive career spanning more than 30 years in the financial services industry, Ben is a seasoned expert on credit card products, users, and industry trends.
As a knowledgeable spokesperson with three decades of experience in both consumer and industry credit card trends, Ben has been quoted in leading national and business media, including The Wall Street Journal, New York Times, Los Angeles Times, Kiplinger Personal Finance, and Time Money. He has been interviewed on CNN, MSNBC, and Marketplace Radio as well as numerous local network affiliate television and radio stations.