Although the holiday season can be joyous, it can also bring financial strain and stress for some as budgets get stretched thanks to holiday shopping.
Luckily, the TPG team can help you maximize your credit card rewards and avoid debt this holiday season. Here are five tips to help you shop and earn rewards like a pro.
Make a plan and a budget
First, map out your holiday shopping plans and set a general budget for spending. Who 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.
A spreadsheet is a great way to keep track of spending and budgeting. You can simply insert your budget into a premade template or write it down on paper. If you already know what you plan to buy, insert links to the sales pages so you know how much it will cost.
While adjusting and finalizing your budget, remember to factor in additional costs due to extra gatherings, like larger grocery and dining expenses.
Utilize credit card perks and statement credits
One of the best things about rewards cards is that they often come with perks to help you save money.
For example, American Express Platinum Card® comes with an up to $75 quarterly statement credit (up to $300 annually) Lululemon credit that can be used at U.S. stores (excluding outlets) or online after enrollment. This is a great way to maximize purchases on clothing, yoga gear or other accessories.
Or, if you have a frequent jet-setter in your life, you can use a credit card’s Global Entry/TSA PreCheck credit to cover their application fee of up to $120.
Amex and Chase frequently have excellent offers available across credit cards to help you save money when shopping with popular retailers. Previously, TPG editors have received Amex Offers on cards like the Delta SkyMiles® Reserve American Express Card at retailers such as Dyson, Ugg and Urban Outfitters.
Related: Everything you need to know about credit card merchant offers
Don’t ignore shopping portals
We talk a lot about shopping portals during this time of year. That's because skipping them is essentially leaving money on the table.
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 or Amex Membership Rewards or Bilt Rewards points.
We suggest using a shopping portal aggregator like Cashback Monitor 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 conveniently 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 points) that you can activate.
Use cash-back credit cards
We’re big fans of points and miles at The Points Guy — and for good reason. We think of points and miles as an investment to save on future travel purchases. But cash-back cards are the way to go if you are looking for a more immediate payout of your rewards to save money on non-travel expenses this holiday season.
A flat-rate cash-back card such as the Citi Double Cash® Card (see ) is an easy way to earn rewards no matter where you shop since it offers 1% cash back when you make a purchase and another 1% cash back when you pay your bill. You can then use those rewards as a statement credit to offset the cost of your bills.
The Chase Freedom Unlimited® (see ) is another great option that earns at least 1.5% back on every purchase.
Related: Best cash-back credit cards
Take advantage of 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 interest. Plenty of rewards credit cards offer a 0% introductory annual percentage rate period for new purchases.
With one of these, you can finance your spending without paying any interest if you budget to pay off your holiday shopping before the introductory period ends.
Another option is to use one of the financing options some credit card issuers offer. Amex and Chase both have solid financing options for purchases over $100. With each program, you choose a set payment plan that includes a fixed monthly fee instead of traditional interest charges.
You’ll almost always save money using these programs compared to paying interest over time.
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 should forgo using your credit cards to maximize your earning and rewards potential as you cross items off of your holiday shopping list.
By setting a budget, using the right card for purchases and taking advantage of card perks and shopping deals, you can focus on enjoying the holiday season without worrying about debt in the new year.
Related: Best cards for holiday purchases
