Tips to maximize rewards and avoid debt this holiday shopping season

Dec 4, 2020

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Editor’s note: This article has been updated with new information.

With Black Friday and Cyber Monday under our belts, the 2020 holiday shopping season has officially begun. Unfortunately, this time can put a financial strain on Americans even during a typical year — and 2020 has been especially tough on many budgets because of the coronavirus pandemic. Though you may be spending less with limited travel happening and large family gatherings being more risky, it may still be tempting (or necessary) to finance holiday spending with a credit card.

We at TPG are always advocates of adhering to a budget and never keeping a balance on your credit cards, but you could be missing out on rewards and savings by not using 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.

In This Post

Make a plan and a budget

First things first: It’s a smart idea to map out your holiday shopping plans and a generalized budget for spending. Who are you shopping for, how much are you planning to spend on gifts and 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 expenses for any family that may visit, additional gas and transit costs for any socially-distant shopping excursions and additional shipping costs for those going fully online with their holiday shopping this year (such as myself).

Utilize credit card perks and credits

One of the best things about rewards credit 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 credit that you can use once every six months (up to $100 statement credit annually). 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 for 2021 travel.

(Photo by Michael Brochstein/SOPA Images/LightRocket via Getty Images)
Take advantage of card benefits like the Amex Platinum Saks Fifth Avenue credit to save money on holiday gifts. (Photo by Michael Brochstein/SOPA Images/LightRocket via Getty Images)

Amex and Chase also 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 American Express® Gold Card at retailers such as Macy’s, Levi’s, HelloFresh (which I am considering getting as a gift for my sister at college) and even a Shop Small offer to rewards shopping with select small businesses.

With my Chase Sapphire Preferred Card, I have Chase Offers at retailers including Under Armour, Groupon, Sam’s Club, Aerie and more.

Don’t ignore shopping portals

We talk a lot about shopping portals during this time of year at TPG, and that’s because refusing to use them is essentially throwing away 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. Major U.S. airlines all 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 (or points-back, if your account is set up to earn Membership Rewards) offer that you can activate.

Woman in cafe shopping online with laptopPhoto by filadendron/Getty Images
Using a shopping portal to make online holiday purchases could earn additional cash back or miles on top of your credit card rewards. (Photo by filadendron/Getty Images)

Use cash-back credit cards

We’re a big fan of points and miles at The Points Guy, and for good reason. But points and miles rewards 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. Through the end of the year, upon enrollment, you’ll earn 5% back with the Discover it Cash Back at Amazon,, Best Buy and (on up to $1,500 in purchases in these rotating categories). The Chase Freedom Flex is offering 5% back on Walmart and PayPal for its latest quarterly bonus (on up to $1,500 in purchases). The information for the Discover it Cash Back has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.

Related: Best cash-back credit cards 

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% APR intro period for new purchases, and if you budget to pay off your holiday shopping before that intro 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

Using a credit card to overspend 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.

Featured image by Heidi Sandstrom/Unsplash.

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