Tips to maximize rewards and avoid debt this holiday shopping season

Nov 30, 2019

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With Black Friday over and Cyber Monday right around the corner, the 2019 holiday shopping season has officially begun. Unfortunately, this time of year can put a financial strain on  Americans. Between buying gifts for friends and family, groceries for large gatherings, holiday party attire and flights to visit family or escape the colder weather, it can be tempting to throw it all on a credit card to pay off over time.

This year, most Americans are hoping to avoid overspending. According to a new Bankrate Holiday Spending Survey, 56% of those surveyed said they are planning to use the money they already have on holiday shopping rather than using credit.

We at TPG are always advocates on 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.

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 those 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 holiday parties and dinners, additional gas or transit costs for your shopping excursions and any new attire you want to purchase for holiday occasions.

Utilize credit card credits and perks

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 a $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.

(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 for 5x at Amazon, $10 back on $50 spent at J. Crew, $30 back on $150 spent at Vineyard Vines and an assortment of rewards offers and statement credits available on eligible purchases at jewelers and department stores. With my Chase Sapphire Preferred Card, I have Chase Offers for 15% back on Bed Bath & Beyond purchases, 20% back on Kindle Unlimited subscription purchases, 5% back on American Eagle/Aerie purchases (which I have already taken advantage of) and more. And Bank of America offers BankAmeriDeals® on its credit and debt cards. It’s currently offering deals including 10% off Starbucks, 15% off Westin hotels after spending $250 and 5% off Walmart groceries.

Take advantage of Black Friday/Cyber Monday deals

When holiday shopping, make sure you’re getting the best price for your gifts. Oftentimes, this is as simple as taking advantage of major sale days such Black Friday, Cyber Monday and Small Business Saturday. At TPG, we’ve done a lot of that research for you with guides on Black Friday and Cyber Monday hotel stay deals, flight deals, Amazon deals, Small Business Saturday and more. But don’t just limit your shopping to these deals. Local businesses and even larger retails will have sales going on throughout the holiday season. If you know what you’re looking for, you can keep an eye out for special prices between now and the end of the year so that you can be confident you’re not spending more money than you have to.

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 free money. By doing your online holiday shopping through a portal, you can earn bonus points or cash back on 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.

Woman in cafe shopping online with laptopPhoto by filadendron/Getty Images
Using a shopping portal to make online holiday shopping 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 like 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 flat-rate option. 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, Target and (on up to $1,500 in purchases in these rotating categories). The Chase Freedom is offering 5% back on department stores, PayPal and Chase Pay (on up to $1,500 in purchases). The information for the Chase Freedom has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.

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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