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Holiday shopping can put a major dent in your wallet—this year, Americans plan to spend an average of $846 on gifts—so why not get a little something in return? If you use your credit cards wisely, you can save money on holiday shopping and maximize your credit rewards—so you can treat yourself to something after the holiday dust settles. Read on for six ways to make the most of your holiday spending.
(Just remember, most of these strategies work for consumers who plan to pay down their credit card balances each month—otherwise, interest charges will wipe out any rewards you may earn.)
1. Apply for a New Rewards Card Now
If you don't have a good rewards credit card in your wallet, there's still time to get one before you start your holiday spending. The good news is that several excellent rewards cards are currently offering 0% introductory APRs, so you can put your holiday purchases on those cards, earn rewards and pay them off over a period of a few months without incurring any interest. Find a list of top holiday shopping rewards cards here, or visit Experian CreditMatch® for the best rewards credit card offers for you based on your FICO® score.
2. Take Advantage of Sign-Up Bonus Offers
The holidays are the perfect time to take advantage of lucrative sign-up bonus offers since most people are spending a little more than usual and can reach their minimum spend requirements easily. Here's how bonus offers work: Typically, a card issuer will require you to spend a certain amount of money on purchases within the first three months of opening an account in order to earn a hefty sum of extra bonus points, cash or miles.
For example, the Chase Freedom® card is offering $150 in cash back after you spend $500 in purchases in the first three months of opening an account, while the Barclaycard Arrival Plus® World Elite Mastercard® offers cardholders the chance to earn 60,000 bonus miles after spending $5,000 in purchases within the first 90 days (60,000 miles can be redeemed for $600 in travel purchases).
3. Make Sure You're Using the Right Card on the Right Purchases
Before you start spending, take some time to do an audit of all the cards in your wallet. Review the terms of these cards—do any put caps on how many points, miles or cash back you can earn? Do any of them offer extra rewards on spending for certain kinds of shopping categories? You don't want to leave money on the table by using the wrong card on the wrong purchase. For example, if you're buying a gift at Bloomingdale's, you'll want to make sure you pay for it using the Chase Freedom® card if you have it because cardholders earn 5% cash back on up to $1,500 in purchases made at department stores during the fourth quarter of 2018.
To help figure out which cards to use when, check out an app like Birch, which takes a look at the credit cards that you own and tells you which ones offer the most rewards on certain spending categories and locations. (Find an Experian review of Birch here.)
4. Use Credit Card and Airline Shopping Portals to Boost Rewards
Many major airline rewards programs and credit card issuers offer online shopping portals that can help you earn extra points on purchases that you were planning to make anyway at featured retailers.
For example, you can earn extra points at 700 stores through Barclaycardrewardsboost.com, the Barclays online shopping portal. Simply log in with your Barclays card account, search the retailer you want to buy from and click "Shop now." The shopping portal takes you to the retailer's website, where you can make your selections and pay for your purchases using any credit card. The shopping portal keeps track of how much you spent and will credit you bonus points. For example, Barclays is currently offering 5 points per $1 spent on purchases at Macys.com if you shop through the portal.
If you know you're going to make holiday purchases online, check out a site like CashbackMonitor.com or evreward.com. There, you can search for different retailers to find out which rewards programs from airlines and banks are offering the best reward rates for that particular store.
5. Buy Gift Cards Strategically
Americans love receiving gift cards as holiday gifts. When you purchase a gift card, make sure you're getting some cash back. For example, you can get a $100 gift card from Amazon.com for effectively $95 if you pay for it using the Discover it® Cash Back card, which is offering 5% back on up to $1,500 in purchases made at Amazon.com during the fourth quarter of 2018.
6. Pay Attention to Amex Offers
American Express cardholders should pay close attention to the Amex Offers section in their online accounts. There, American Express offers targeted discount deals at a wide variety of merchants. You must log in to your American Express account, scroll to the Amex Offers section, and browse through a tailored list of offers for each Amex card on your account. If you're interested in an offer, you must opt-in and then make the purchase with your Amex card. The savings can be significant. For example, one offer available on some cards right now gives consumers $15 back on purchases of $75 or more at Aveda.
Editorial Disclaimer: Opinions expressed here are author's alone, not those of any bank, credit card issuer or other company, and have not been reviewed, approved or otherwise endorsed by any of these entities. All information, including rates and fees, are accurate as of the date of publication.
This article was originally published on November 12, 2018, and has been updated.
*Credit score calculated based on FICO® Score 8 model. Your lender or insurer may use a different FICO® Score than FICO® Score 8, or another type of credit score altogether. Learn more.