5 tips to maximize credit card rewards and avoid debt this holiday season

The holiday season is a time of joy and celebration, but it can also bring financial strain and stress. With the pressure to buy gifts and participate in festive activities, many people find themselves overspending and accumulating debt. However, with a little planning and the right strategies, you can maximize your credit card rewards and avoid debt this holiday season. In this article, we will explore five tips to help you shop and earn rewards like a pro.

1. Make a plan and a budget
The first step to avoiding financial strain during the holiday season is to create a plan and set a budget. Start by mapping out your holiday shopping plans and identifying the people you need to buy gifts for. Consider how much you want to spend on each person and factor in any additional expenses such as decorations, food, and travel. By setting expectations and sticking to a budget, you can prevent impulse buys and overspending.

To keep track of your spending and budgeting, consider using a spreadsheet or a premade template. You can also write down your budget on paper if you prefer a more tangible approach. As you finalize your budget, don’t forget to include larger expenses like grocery and dining costs for any family gatherings or parties you’ll be hosting. Additionally, factor in any extra gas or transit costs that may arise during the holiday season.

2. Utilize credit card perks and statement credits
One of the advantages of using rewards cards is the perks and statement credits they offer. Take advantage of these benefits to save money while shopping. For example, The Platinum Card® from American Express provides a $50 statement credit for Saks Fifth Avenue every six months (up to $100 annually). If you have a frequent traveler in your life, you can use a credit card’s Global Entry/TSA PreCheck credit to cover their application fee up to $100.

Keep an eye out for excellent offers from credit card issuers like Amex and Chase. These offers can help you save money when shopping with popular retailers. In the past, TPG editors have received Amex Offers on cards like the Delta SkyMiles® Reserve American Express Card for retailers such as Urban Outfitters, Ugg, and Dyson. Take advantage of these offers to maximize your savings.

3. Don’t ignore shopping portals
Shopping portals are a great way to earn bonus points or cash back when doing your holiday shopping online. Many major U.S. airlines have their own shopping portals, allowing you to earn additional miles for every eligible purchase. Alternatively, you can use third-party portals like Rakuten to earn Membership Reward points for American Express.

To find the best shopping portal for each online purchase, consider using a shopping portal aggregator like CashbackMonitor. This tool allows you to compare different portals and their offers in one place. Additionally, if you’re a Rakuten user, you can download the Chrome extension, which will notify you of any cash-back or points-back offers while you browse.

4. Use cash-back credit cards
While points and miles are great for saving on future travel expenses, cash-back cards can provide more immediate rewards to help you save money on non-travel expenses during the holiday season. A flat-rate cash-back card like the Citi Double Cash® Card is an easy way to earn rewards no matter where you shop. You can then use these rewards as a statement credit to offset the cost of your bills. The Chase Freedom Unlimited is another option that earns at least 1.5% back on every purchase.

If you’re shopping with larger retailers or online shops that offer PayPal as a payment method, using a rotating category card can be a great choice. These cards typically offer higher cash-back rates for specific categories that change every quarter.

5. Consider financing options
While carrying a balance on your credit card is not ideal, there are financing options available that can help you manage larger purchases over time without paying excessive amounts of interest. Many rewards credit cards offer a 0% introductory APR period for new purchases. If you budget to pay off your holiday shopping before this introductory period ends, you can finance your spending without incurring any interest charges.

Additionally, some credit cards have released new financing options this year. For example, Chase and Amex offer solid financing programs for purchases over $100. With these programs, you can choose a set payment plan that includes a flat monthly fee instead of interest charges. Using these programs can help you save money compared to paying interest over time to pay off your purchases.

In conclusion, with careful planning and the right strategies, you can maximize your credit card rewards and avoid debt during the holiday season. By creating a budget, utilizing credit card perks and shopping portals, using cash-back cards, and considering financing options, you can make the most of your holiday shopping while staying financially responsible. Remember, the key is to set expectations, stick to your budget, and avoid carrying a balance on your credit cards. Happy shopping!

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