Yahoo Finance 6 Ways To Boost Your Credit Rewards During the Holidays
Despite several headwinds, including inflation, soaring rates and the resumption of student loans, Americans are ready to spend their money this holiday season.
The National Retail Federation forecast that holiday spending is expected to reach record levels during November and December and will grow between 3% and 4% over 2022 to between $957.3 billion and $966.6 billion.
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Much of this spending will be done with credit cards, as these are taking the lead among credit options for holiday shopping this year, at 27%, according to Lending Club.
In turn, experts said you might as well make the most of it and maximize ways to boost your credit rewards during the holiday season.
Before you dive headfirst into holiday shopping, use a credit card that gives you something back, whether it’s rewards or cash back, said Joe Camberato, CEO of National Business Capital.
“If you don’t have one yet, look into it before you start swiping for gifts,” he said. “Also, keep an eye on 0% APR cards. They might seem like a good deal, but watch out for the interest rates shooting up after that initial period.”
He noted, however, that managing your credit cards is similar to a balancing act. If you have a few rewards cards, pay down those balances for those that match your holiday spending.
“Create some space so your card can handle the holiday expenses without stressing your credit too much,” he said. “That way, you earn rewards which will soften the blow while your credit score stays in good shape.”
Here are some ways to boost your rewards this season.
Take Stock of the Cards You Have and Perks They Offer
Many people are sitting on unused credit card rewards and gift cards that they should put to work around the holidays, said Ted Rossman, senior industry analyst at CreditCards.com. Also, take advantage of credit card perks you already have access to.
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“For instance, many credit cards give a free ShopRunner membership (free two-day shipping and free returns from many popular retailers),” he said. “Chase has an online shopping portal that gives bonus points when you click through their portal to certain retailers’ websites.”
Amex Offers is an example of a card-linked offer program that can be lucrative — basically digital coupons you download to your credit card account. And plenty of cards have extended warranty and purchase protection coverage.
“Of course, most people have rewards credit cards that they should take advantage of around the holidays,” Rossman said. “I love getting money back from purchases I would have made anyway. Just be sure not to overspend.”
If you carry a balance, Rossman cautioned that interest charges outweigh your rewards very quickly, so pursue rewards only if you’re free from credit card debt.
Another tip: Stack discounts.
Combine a rewards credit card that you pay in full with a store promotion and also go through an online shopping portal. That’s three ways to save on the same purchase, Rossman said.
Use This Time To Sign Up for New Cards
According to Rossman, the holidays can be a great time to sign up for a new credit card, because sign-up bonuses typically require you to spend anywhere from a few hundred to a few thousand dollars within your first few months with the card.
“Most people spend more around the holidays,” he said, “so, as long as you don’t overspend or pay interest, I love the idea of turning this spending into a free trip or earning additional cash back thanks to a new credit card.”
Charge the Group’s Activity, Then Collect the Money
“Have plans to go to the nutcracker with a few people this year? Buy all of the tickets with your rewards card to reap the most cash back, points or miles,” said Erica Sandberg, consumer finance expert for CardRates.com.
Have your friends repay you immediately, and then make sure you send that money to your credit card company right away. You multiply your rewards and ensure that you won’t get into debt, she added.
Use a Different Card for Different Purchases
Depending on the card you have, you may earn extra points at specific stores or for certain items. In turn, Sandberg recommended checking the rewards rate before you shop.
“For example,” she said, “if you have an American Express Gold Card and you will be celebrating the holidays at a restaurant, choose this card because you’ll earn 4X membership rewards points.”
Use a Flat-Rate Cash-Back Card
Because many credit cards have select categories in which you can earn bonus rewards, it’s a good idea to pay attention to what you spend more on during the season.
So, if you’re shopping across a wide array of stores, dining out and booking travel, consider using a flat-rate cash-back card to earn more back across every category rather than having to try to track categories or retailer bonus rewards, said consumer and money saving expert Andrea Woroch.
“For example, the Bread Cashback American Express Card offers an unlimited 2% back on every purchase and from every store/business, from groceries to big-box stores to medical bills to clothing,” she said, “and there’s no limit on how much you can earn — unlike you see with other rewards cards that put caps on earnings.”
That means you could earn much more back during the holidays by using a single credit card rather than multiple cards that have limitations on reward categories, she added.
Proceed With Caution and Budget
Several experts emphasized the need to approach rewards cards carefully and cautiously.
“Cards that offer rewards points often carry a higher interest rate,” said Tanya Peterson, vice president of brand at Achieve. “If you already have a rewards card, make absolutely sure you will charge only what you can pay off each month in full. That means creating a specific holiday budget that fits within your overall household budget.”
Peterson recommended making a list and sticking to it. “Otherwise, with a credit card in hand, it’s all too easy to overspend.”
A list also will help you refrain from buying for yourself just because you spot a great price.
“Bottom line: It is not worth it to go into debt at the holidays,” Peterson said, “and particularly not worth it just to earn rewards.”
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This article originally appeared on GOBankingRates.com: 6 Ways To Boost Your Credit Rewards During the Holidays
