Maximizing Your Points and Credit Card Spend This Holiday Shopping Season

Update: Some offers mentioned below are no longer available. View the current offers here.

The throes of the holiday shopping season are upon us and most retail analysts are expecting double digit increases in online and in-store shopping. With so much spending, it's critical to maximize your credit card and points strategy or else you're frankly throwing money down the drain.

Here are a couple tips on selecting the best credit cards and portals to get the most value back for your spend:

Online Shopping Portals and Why They're So Lucrative

Basically online retailers pay a commission to websites to refer them business – so these online shopping portals are simply intermediary sites where you click through to popular retailers' sites and in doing so, a cookie is stored on your computer and you get a certain number of miles/points for every dollar you end up spending. Say that retailer paid the portal 10% of your total purchase for the referral – the portal in turns kicks you back, say 5%, in the form of miles usually deposited automatically into your account a week or two after the purchase.

From a consumer perspective there’s no reason not to take advantage of these portals because they take you to the exact same site as if you went there directly, but instead you rack up a bunch of extra points that are in addition to the points you earn from your credit card. It’s a no brainer double dip.

I know people like to physically go into stores to pick out merchandise, but what I recommend is buying what you need online and selecting the in-store pick up option if available. If necessary, you can buy online than head into the store and exchange the merchandise you've bought for store credit to buy what you actually want. This way you get the lucrative online shopping bonuses and you can shop in store. Of course most stores will take back points if you return merchandise, but exchanging may allow you to still keep the portal points. Can’t hurt to try!

At a very minimum you are earning portal points for the merchandise you don’t need to return/exchange. Plus you should really just get in the habit of always shopping online to maximize your points earning, so no better time than the present to start.

To really maximize portals, its sometimes possible to purchase a gift card through a portal and earn the bonus and then use that gift card again through the portal to get yet another bonus on the same amount of spend! Some have restrictions against earning points/miles when using gift cards, but often they aren't actually enforced. These systems are pretty basic so if they see a purchase at a certain retailer, many portals will just give you the points and not check to see if you used a gift card. Can't hurt to try! One of my favorite bloggers, The Frequent Miler has a "laboratory" setup to try buying different gift cards through portals to see what works and doesn't, so check out his reports for more info.

My favorite portal is the Chase Ultimate Rewards earning portal because the points earned can be accrued into your central Ultimate Rewards account and then transferred to partners like United, Hyatt and British Airways. On top of the flexibility factor, the earning ratios are generally better than going through those partners’ portals directly - sometimes up to 10 points per dollar.

Here’s a list of some popular shopping portals:

Air Canada: Aeroplan EStore
American: AAdvantageEshopping.com
Amtrak: Amtrak Guest Rewards
Chase: Ultimate Rewards Shopping (Note: you should use a Chase Ultimate Rewards credit card when using this portal. It is possible to use other cards, but if the points don't post properly reps will be much more inclined to assist if you used a Chase UR card).
Choice Rewards: Choice Privileges Mall
Citi: Thank You Shopping
Delta: Skymilesshopping.com
Frontier: Early Returns Mall
Hawaiian Airlines: Hawaiian Airlines eMarket
Hilton HHonors: Hilton HHonors Earnings Mall
Marriott Rewards: Shop My Way
Mastercard: Mastercard Marketplace
Priority Club: Priority Club Shopping
Southwest: Rapid Rewards Shopping
United: Mileageplusshopping.com
US Airways: Dividend Miles Shopping Mall

Virgin Atlantic: ShopsAway

Keeping Track of Bonuses

Deciding which shopping portal to go through to do which shopping and earn which bonus can be daunting with all the choices out there, but there are several sites that do the heavy lifting for you and simply list the various bonuses either by rewards program or by merchant. So you can check what bonuses Marriott's online shopping portal is hosting at the moment; or conversely, you can search by the merchant you want to shop at, like Best Buy, and see which portals are offering bonuses on purchases there.

Tomorrow I'll be posting a top 10 list of top travel portal deals, so stay tuned.

In the meantime, check out EVreward.com to find different earning ratios between portals though note that it’s not 100% perfect so always check your preferred portals directly for the most up-to-date earning information. There's also this simple site that tracks Chase Ultimate Rewards earning ratios on a monthly basis, which is a great resource. Also BigCrumbs, Ebates and Extrabux are cash back sites if you don't want to rack up miles or points.

Credit Card Sign-up Bonuses

The "best" credit card bonus for you really depends on what you want out of your card, but purely based on value of the bonus, here are my top 5 picks:

1) 50,000 miles for the Citi American Airlines offers - note, these are somewhat rogue and don't list the offer explicitly, but per the Flyertalk thread people are still getting them. You can get two cards in the same day with only a single credit hit.
2) 50,000 points for the Chase Ink Bold and Ink Plus cards after $5,000 spent within 3 months, $95 annual fee waived the first year. 50,000 Chase points = roughly $1,000 to me since they can be transferred to United, British Airways, Korean, Southwest, Hyatt, Marriott, Ritz-Carlton, Priority Club and Amtrak.
3) 50,000 points for the American Express Business Gold Rewards card after $5,000 spent within three months, $175 annual fee waived the first year. Note: this offer expires November 26, 2012.
4) 50,000 points with the Chase Southwest Visa after $2,000 in spend, $99 annual fee. The sign-up bonus = ~$900 in Wanna Get Away fares and if you also get the business card, you'll have almost enough points for 2 years of free flights with their companion pass.
5) 40,000 points for the Chase Sapphire Preferred after $3,000 spent within 3 months, $95 annual fee waived the first year.

Credit Card Category Bonuses

On the other side of things, some credit cards offer multiple-point bonuses per dollar you spend at certain categories of merchants - so you can maximize your points each time you spend money on gas or groceries, for instance. Gas doesn't really count as holiday shopping - most of us have to buy it year-round - but you can often find gas stations that stock gift cards both from various merchants, as well as generic Visa and Amex gift cards that you can use anywhere you'd normally use a credit card, meaning you can really rack up the bonus points. Here are some of the best cards with category spend bonuses out there:

American Express® Gold Card: 3 points for airfare, 2 points at US gas stations and US supermarkets per $1. If you are going to buy gift cards, you might want to consider getting them at a US gas station or US supermarket.

Chase Ink Bold and Chase Ink Plus: 5 points per $1 at office supply stores (including gift cards and pre-paid credit cards which can be used at online portals), 2x on gas and hotels.

Chase Freedom: 5 points per $1 on quarterly rotating categories. This quarter's merchants include Kohl's and Best Buy (this card teams up well with Sapphire Preferred as I outlined in this post).

Chase Ink Classic: 5 points per $1 at office stores, 2x on fuel and lodging

Chase Sapphire Preferred: 2 points per $1 on travel and dining (great for paying for holiday parties or buying restaurant gift cards)

Citi Forward Card: 5 point per $1 at restaurants and on books, movies and music

Purchase Protection and Extended Warranties

Most credit cards also offer some form of purchase protection when you use them to make purchases so that if something goes wrong with your merchandise - damage or theft - within a certain amount of time, you will not be liable for the cost.

Amex: Probably the best-known purchase protection program, Amex cards offer coverage for up to 90 days after the date of purchase if your merchandise is lost, stolen or damaged, and includes purchases made all over the world for you or someone else up to the cost charged to your card up to $1,000 per purchase and $50,000 per card per year. Amex also has return protection where, if you change your mind and want to return an item, they'll refund the charge even if the merchant won't take it back, up to $300 per purchase and $1,000 annually. Amex also offers extended warranties for up to 1 year on purchases where the manufacturer's warranty is 5 years or less.

MasterCard: Benefits vary by card, but MasterCard offers cardholders four point purchase protection that includes extended warranties and other benefits . MasterCard's purchase protection includes coverage of lost or damaged items within 90 days of purchase up to $1,000 per purchase and $25,000 annually per card annually. Using a MasterCard to make a purchase also doubles its warranty period up to one year automatically. MasterCard also offers price protection, which means if you purchase something then discover the same item at a lower price within 60 days, MasterCard will refund you the difference up to $250. As with Amex, MasterCard offers return protection where, when you return an item within 60 days, even if the merchant won't accept it, MasterCard will issue a refund up to $250 (many items such as art, jewelry and even DVD's aren't covered, though).

Visa Signature: Visa Signature cards like the British Airways Visa and the Sapphire Preferred also offer a slew of benefits including purchase protection and extended warranties. Many Visa Signature card purchases are protected against theft or damage for the first 90 days from the date of purchase, and will cover the cost to replace, repair, or reimburse the cardholder for eligible items of personal property purchased entirely with an eligible Visa Signature card up to a maximum of $500 per claim and $50,000 per cardholder in the event of theft, damage due to fire, vandalism, accidentally discharged water, or certain weather conditions. Visa Signature’s warranty protection offers extensions that double the time period of the original manufacturer’s written U.S. repair warranty up to 1 additional year on eligible warranties of 3 years or less when an item is purchased entirely an eligible Visa Signature card.