While the goal is to avoid racking up debt, you can use rewards credit cards to your advantage during the holiday season. With some intentional thought and strategy, these cards can help you spend wisely and take advantage of a variety of perks during this time of year. However, there are some tips and strategies you should use to ensure that your rewards credit cards do not become more trouble than they are worth. Take a look at our list credit card spending and savings tips to develop a smart plan for the holidays.
Cash Back, Points, or Miles? Choose Wisely.
Make sure that any credit card that has rewards attached to it aligns with your spending goals. For example, if you want to have more money in the bank for groceries, clothing purchases, or eating out, a cashback credit card may be the best option. However, if you are a traveler, a card with travel points or miles is the better fit.
Avoid Cards That Promise Points in Exchange for Creating a Large Balance
Ever heard this one? You can get 20,000 points if you charge $4,000 in three months. Don’t fall for these offers. It may be tempting to do this, especially during the holidays. However, if you do not already have the $4,000 in cash to spend, don’t rack up a large balance (with a likely high-interest rate), the reward isn’t worth it.
Get Shipping and Returns Perks
There are rewards credit cards that offer free shipping and free returns to several stores. In December, you are likely gearing up to package gifts and send them off to family and friends. On the other hand, in January, you may want to return some of the goodies you received. As a result, check into a card that allows for these free perks.
Pay for Everything with Your Rewards Credit Cards—Then Pay It Off Immediately
As you get close to the holidays, it’s likely that you will be looking for ways to redeem your points. You can maximize the points you receive by paying for eligible items using your cards as much as possible. This practice will allow you to rack up more points. However, this can only work to your benefit if you pay off the balance immediately to prevent a lingering balance.
Increase Your Bonus Rewards with the Help of Gift Cards
Gift cards are a popular item today. In fact, they are preferred by many (as a gift to receive as well as one to give). Along with their desirability, did you know gift cards can help you increase your rewards points?
For example, if you are purchasing a specific gift card, determine where to buy it, depending on the type of rewards you can receive. If you are purchasing a restaurant gift card, buy it from a location that is connected to a rewards card that offers points for restaurants.
Rewards Credit Cards Can Help You Save During the Holiday Season
Whenever you use rewards credit cards, you have to be strategic and intentional. Before you spend, you should always have a plan, especially when it comes to credit cards. Make sure that you are spending money you know you can pay back without accruing interest while also increasing your points.
Credit cards can be tricky to master effectively. Therefore, we invite you to check out this article that can help you integrate them into your holiday budgeting and savings plan: The Best Credit Cards to Use During the Holidays
Also, if you already find yourself struggling with credit card debt or your credit in general, my book Perfect Credit: 7 Steps to a Perfect Credit Rating is a great resource to get you on track.