5 tips to maximize rewards and avoid debt this holiday shopping season
Editor’s note: This article has been updated with new information.
The holiday season can be a joyous yet stressful time of year that puts a financial strain on many Americans. We here at TPG are always advocates of adhering to a budget and avoiding carrying a balance on your credit cards. However, you could be missing out on rewards and savings if you don't use a credit card for your holiday shopping purchases.
Today, I’m walking through a few tips on how you can use a credit card to save money, maximize rewards and avoid going into debt this holiday season.
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Make a plan and a budget
First things first: Map out your holiday shopping plans and set a general budget for spending. What people are you shopping for? How much are you planning to spend on gifts? What other expenses should you factor into your holiday budget? These are all good questions to help you set expectations and prevent impulse buys that can lead to overspending.
Don’t forget to factor in larger grocery and dining expenses for any family that may visit, as well as additional gas and transit costs.
Related: Which budgeting technique is right for you?
Utilize credit card perks and statement credits
One of the best things about rewards cards is that they often come with perks that help you save money. For example, The Platinum Card® from American Express comes with an up to $50 Saks Fifth Avenue statement credit that you can use once every six months (up to $100 statement credit annually; enrollment required).
Or, if you have a travel lover in your life, you can use a credit card’s Global Entry/TSA PreCheck credit to cover their up-to-$100 application fee.
Amex and Chase frequently have excellent offers available across credit cards to help you save money when shopping with popular retailers. For example, I currently have Amex Offers on my Delta SkyMiles® Reserve American Express Card at retailers such as Madewell, Dyson, BlueApron (which I am considering getting as a gift for my sister at college) and even a "Shop Small" offer for rewards shopping with select small businesses. Enrollment is required for select benefits.
With my Chase Sapphire Preferred Card, I have Chase Offers at retailers including Whole Foods, World of Hyatt, Sam's Club and more.
Related: Three changes Chase Offers should make to compete with Amex Offers
Don’t ignore shopping portals
We talk a lot about shopping portals during this time of year, and that’s because forgetting to use them is essentially throwing away more money.
By doing your online holiday shopping through a portal, you can earn bonus points or cash back at a massive number of online retailers. Most of the major U.S. airlines have shopping portals to help you earn additional miles on every eligible purchase, or you can use third-party portals such as Rakuten to earn cash back.
I suggest using a shopping portal aggregator like CashbackMonitor to find the best portal for each online purchase. That way you don’t have to sift through each portal’s offers individually. If you are a Rakuten user, you can also download the Chrome extension, which will notify you while browsing if there is a cash-back offer (or points-back offer, if your account is set up to earn Membership Rewards) that you can activate.
Related: Your guide to maximizing shopping portals for your online purchases
Use cash-back credit cards
We’re big fans of points and miles at The Points Guy — and for good reason. But points and miles are more of an investment to save on future travel purchases. If you are looking for a more immediate payout of your rewards to save money on non-travel expenses this holiday season, cash-back cards are the way to go.
A flat-rate cash-back card such as the Citi® Double Cash Card is an easy way to earn rewards no matter where you shop, and you can then use those 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 is also a great choice.
Related: Best cash-back credit cards of 2021
Financing options
While carrying a balance is never optimal, if you play your cards right, you can still finance larger purchases over time without paying exorbitant amounts in interest. Plenty of rewards credit cards offer a 0% introductory APR period for new purchases, and if you budget to pay off your holiday shopping before that introductory period ends, you could finance your spending without paying any interest.
Another option is using one of the new financing options some credit cards have released this year. Chase and Amex both have solid financing options for purchases over $100. With each program, you choose a set payment plan that includes a flat monthly fee rather than interest. I did the math on a recent guide comparing these two financing options, and you almost always save money using these programs versus paying out interest over time to pay off your purchases.
Related: My Chase Plan vs. Amex’s Pay It® Plan It®
Bottom line
Overspending on a credit card is never a good idea, but that doesn’t mean you shouldn’t use credit cards to maximize your holiday shopping. By setting a budget, using the right card for purchases and taking advantage of card perks and shopping deals, you can make it out of the holiday season with no debt to worry about in the new year.
Additional reporting by Stella Shon.
Top offers from our partners
How we chose these cards
TPG featured card
Rewards
| 3X | Earn 3X Miles on Delta purchases and purchases made directly with hotels. |
| 2X | Earn 2X Miles at restaurants worldwide, including takeout and delivery in the U.S. and at U.S. supermarkets. |
| 1X | Earn 1X Miles on all other eligible purchases. |
Intro offer
Annual Fee
Recommended Credit
Why We Chose It
Build your loyalty to Delta by applying for the carrier's mid-tier card option, the Delta SkyMiles Platinum card. The annual fee is quickly recouped by the card's travel perks, such as an application credit to Global Entry or TSA Precheck, annual companion certificate and so much more. Plus you can fast-track to elite status simply through card spend.Pros
- Earn bonus Medallion® Qualification Miles (MQMs) and an Medallion Qualifying Dollar (MQD) waiver when you hit specific spending thresholds with your card within a calendar year
- Receive a Domestic Main Cabin round-trip companion certificate each year
- Statement credit for TSA PreCheck/Global Entry fee (up to $100)
- First checked bag free
Cons
- Doesn't make sense if you don't fly Delta
- SkyMiles aren't the most valuable airline currency
- Earn 90,000 bonus miles after you spend $4,000 in purchases on your new Card in your first 6 months.
- Receive a Domestic Main Cabin round-trip companion certificate each year upon renewal of your Card. Payment of the government imposed taxes and fees of no more than $80 for roundtrip domestic flights (for itineraries with up to four flight segments) is required. Baggage charges and other restrictions apply. See terms and conditions for details.
- Enjoy your first checked bag free on Delta flights. Plus enjoy Main Cabin 1 Priority Boarding and settle into your seat sooner.
- New: Card Members get 15% off when using miles to book Award Travel on Delta flights through delta.com and the Fly Delta app. Discount not applicable to partner-operated flights or to taxes and fees.
- Earn 3X Miles on Delta purchases and purchases made directly with hotels.
- Earn 2X Miles at restaurants worldwide including takeout and delivery in the U.S., and at U.S. supermarkets.
- Earn 1X Mile on all other eligible purchases.
- Enjoy a per-visit rate of $50 per person for Card Members and up to two guests to enter the Delta Sky Club when traveling on a Delta flight.
- Fee Credit for Global Entry or TSA PreCheck® after you apply through any Authorized Enrollment Provider. If approved for Global Entry, at no additional charge, you will receive access to TSA PreCheck.
- Earn up to 20,000 Medallion® Qualification Miles (MQMs) with Status Boost® per year. After you spend $25,000 in purchases on your Card in a calendar year, you can earn 10,000 MQMs up to two times per year, getting you closer to Medallion® Status. MQMs are used to determine Medallion® Status and are different than miles you earn toward flights.
- No Foreign Transaction Fees.
- $250 Annual Fee.
- Terms Apply.
- See Rates & Fees
Rewards Rate
| 3X | Earn 3X Miles on Delta purchases and purchases made directly with hotels. |
| 2X | Earn 2X Miles at restaurants worldwide, including takeout and delivery in the U.S. and at U.S. supermarkets. |
| 1X | Earn 1X Miles on all other eligible purchases. |
Intro Offer
Earn 90,000 bonus miles after you spend $4,000 in purchases on your new Card in your first 6 months.Earn 90,000 Bonus Miles50,000 Bonus MilesAnnual Fee
$250Recommended Credit
Credit ranges are a variation of FICO© Score 8, one of many types of credit scores lenders may use when considering your credit card application.670-850Excellent/Good
Why We Chose It
Build your loyalty to Delta by applying for the carrier's mid-tier card option, the Delta SkyMiles Platinum card. The annual fee is quickly recouped by the card's travel perks, such as an application credit to Global Entry or TSA Precheck, annual companion certificate and so much more. Plus you can fast-track to elite status simply through card spend.Pros
- Earn bonus Medallion® Qualification Miles (MQMs) and an Medallion Qualifying Dollar (MQD) waiver when you hit specific spending thresholds with your card within a calendar year
- Receive a Domestic Main Cabin round-trip companion certificate each year
- Statement credit for TSA PreCheck/Global Entry fee (up to $100)
- First checked bag free
Cons
- Doesn't make sense if you don't fly Delta
- SkyMiles aren't the most valuable airline currency
- Earn 90,000 bonus miles after you spend $4,000 in purchases on your new Card in your first 6 months.
- Receive a Domestic Main Cabin round-trip companion certificate each year upon renewal of your Card. Payment of the government imposed taxes and fees of no more than $80 for roundtrip domestic flights (for itineraries with up to four flight segments) is required. Baggage charges and other restrictions apply. See terms and conditions for details.
- Enjoy your first checked bag free on Delta flights. Plus enjoy Main Cabin 1 Priority Boarding and settle into your seat sooner.
- New: Card Members get 15% off when using miles to book Award Travel on Delta flights through delta.com and the Fly Delta app. Discount not applicable to partner-operated flights or to taxes and fees.
- Earn 3X Miles on Delta purchases and purchases made directly with hotels.
- Earn 2X Miles at restaurants worldwide including takeout and delivery in the U.S., and at U.S. supermarkets.
- Earn 1X Mile on all other eligible purchases.
- Enjoy a per-visit rate of $50 per person for Card Members and up to two guests to enter the Delta Sky Club when traveling on a Delta flight.
- Fee Credit for Global Entry or TSA PreCheck® after you apply through any Authorized Enrollment Provider. If approved for Global Entry, at no additional charge, you will receive access to TSA PreCheck.
- Earn up to 20,000 Medallion® Qualification Miles (MQMs) with Status Boost® per year. After you spend $25,000 in purchases on your Card in a calendar year, you can earn 10,000 MQMs up to two times per year, getting you closer to Medallion® Status. MQMs are used to determine Medallion® Status and are different than miles you earn toward flights.
- No Foreign Transaction Fees.
- $250 Annual Fee.
- Terms Apply.
- See Rates & Fees