How to turn your holiday shopping into a free vacation
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Before making a large purchase, I always consider how I can maximize it. And, especially if you have an extensive holiday shopping list, this mentality could help you turn your holiday shopping into a free vacation. Even if you have a relatively small shopping list this year, it’s still worth maximizing your holiday shopping to build up rewards for your next trip.
Today I’ll discuss several ways to leverage your holiday shopping for a vacation. The simplest is to apply for a new card now and then use your holiday shopping to quickly earn the card’s welcome bonus. But, even if you don’t want to add a new card to your wallet right now, there are several other ways you can work toward your next vacation while shopping for the holidays.
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Apply for a new card
The easiest way to get a free vacation from your holiday shopping is to apply for a new card. There are multiple cards with limited-time offers, including cards with 100,000-point or higher bonuses. And some of these cards can easily net you more than $1,000 in first-year value.
The idea is to apply for the new card now and then use it for all of your holiday shopping. According to the National Retail Federation, the average consumer plans to spend $650 on gifts, $230 on non-gift holiday purchases such as food and decorations and $117 on other holiday purchases this holiday season.
Although the average consumer will spend about $1,000 extra this holiday season, you may plan to spend much more or less. Regardless of how much you plan to spend this year, the additional spending may be just what you need to reach the minimum spending requirement and earn the welcome bonus on a new card.
Cards with large welcome bonuses
If you’re looking for a new card, you may want to consider one of the following cards that currently offers an elevated welcome bonus:
- Capital One Venture Rewards Credit Card: Earn 100,000 bonus Capital One Venture Rewards miles when you spend $20,000 on purchases in the first 12 months from account opening, or still earn 50,000 miles if you spend $3,000 on purchases in the first three months ($95 annual fee)
- The Platinum Card® from American Express: Earn 75,000 Membership Rewards points after you spend $5,000 on purchases on your new card in your first six months of card membership. Plus, earn 10x points at U.S. gas stations and U.S. supermarkets on up to $15,000 in combined eligible purchases during your first six months of card membership. ($550 annual fee, see rates and fees)
- American Express® Gold Card: Earn 60,000 Membership Rewards points after you spend $4,000 on purchases on your new card in your first six months of card membership. ($250 annual fee, see rates and fees)
- Ink Business Preferred® Credit Card: Earn 100,000 bonus Chase Ultimate Rewards points after you spend $15,000 on purchases in the first three months from account opening ($95 annual fee)
You might notice that none of these cards earn airline miles or hotel points. Instead, these cards all earn transferrable points, which can provide flexibility when planning a trip. After all, you can use transferrable points to book travel through the bank’s travel portal. Or, you can transfer your rewards to airline and hotel partners to book award travel.
Granted, all of these cards require more than $1,000 of spending to earn the welcome bonus. But, you have at least three months to reach the spending requirement. You may also be able to reach the spending requirements by shifting your everyday spending to the card.
Cards with modest welcome bonuses
If you’re looking for a lower spending requirement, there are several everyday spending cards to consider. These cards offer smaller sign-up bonuses that you can earn after spending $1,000 or less on holiday shopping. And, each of these cards earns better than 1x on at least some holiday spending categories.
|Card||Welcome offer||Earning rates||Annual fee|
|Chase Freedom Unlimited||$200 bonus after you spend $500 in the first 3 months
Earn 5% cash back on grocery store purchases on up to $12,000 spent in the first year (excluding Target and Walmart)
|5% on travel purchased through Chase Ultimate Rewards
3% on dining at restaurants, takeout and eligible delivery services
3% on drugstore purchases
1.5% on all other purchases
|Chase Freedom Flex||$200 bonus after you spend $500 in the first 3 months
Earn 5% cash back on grocery store purchases on up to $12,000 spent in the first year (excluding Target and Walmart unless included in the quarterly 5% category)
|5% on up to $1,500 in combined purchases in bonus categories each quarter you activate (Paypal and Walmart purchases in 2020 Q4)
5% on travel purchased through Chase Ultimate Rewards
3% on dining at restaurants, takeout and eligible delivery services
3% on drugstore purchases
1% on all other purchases
|Amex EveryDay® Preferred Credit Card from American Express||15,000 Membership Rewards points after you spend $1,000 within your first 3 months||3x at U.S. supermarkets on up to $6,000 per calendar year in purchases; then 1x
2x at U.S. gas stations
1x on all other purchases
Use your card 30 or more times in a billing period and earn 50% extra points on your purchases
The information for the Chase Freedom Flex and Amex EveryDay Preferred has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.
Maximize your purchases
Regardless of whether you decide to apply for a new card, there are plenty of ways to use your holiday shopping to fund your next vacation. Whether you’re looking to earn rewards or save money, here are some aspects to consider.
Use the right card for purchases
The best card for a specific holiday purchase depends on which cards you carry, the merchant’s category, your earning goals and other aspects. If you’re working toward a minimum spending requirement on a new card, you’ll usually want to use that card. Otherwise, you’ll generally want to use a card that will earn bonus rewards on your purchase.
When making a purchase, it’s essential to consider the merchant’s category. If you are buying concert tickets or an annual streaming membership, you may want to use one of the best cards for entertainment spending. And, if you are purchasing a nice bottle of wine or gift cards, you may want to shop at a grocery store and use one of the best cards for groceries.
A few cards with rotating bonus categories offer fourth quarter categories that are well-suited for holiday shopping:
- Chase Freedom Flex and Chase Freedom (no longer accepting applications): 5% cash back on up to $1,500 in combined Paypal and Walmart purchases this quarter once you activate. If you have a Chase Ultimate Rewards card, you’re effectively earning 5x Ultimate Rewards points on these purchases.
- Discover it Cash Back: 5% cash back on up to $1,500 in Amazon.com, Walmart.com and Target.com purchases this quarter once you enroll.
The information for the Chase Freedom and 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.
Unfortunately, many holiday purchases don’t fall into any of the bonus categories offered by most travel rewards cards or cash-back rewards cards. So, you’ll generally want to use one of the best cards for everyday spending when making your holiday purchases. For example, you may want to use one of the following cards:
- Chase Freedom Unlimited: 5% on travel purchased through Chase Ultimate Rewards; 3% on dining at restaurants, takeout and eligible delivery services; 3% on drugstore purchases; 1.5% on all other purchases; you can convert cash-back rewards to Ultimate Rewards points if you have a card that earns Chase Ultimate Rewards points ($0 annual fee)
- Capital One Venture Rewards Credit Card: 5x Capital One Venture Rewards miles on hotel and car rental purchases made with the card through Capital One Travel; 5x miles on Uber Eats through Jan. 31, 2021; 2x miles on everything else ($95 annual fee)
- Amex EveryDay Preferred Credit Card: 3x Membership Rewards points at U.S. supermarkets (on up to $6,000 per calendar year in purchases, then 1x); 2x points at U.S. gas stations; 1x points on all other purchases; Earn 50% extra points when you use your card 30 or more times on purchases in a billing period ($95 annual fee)
- The Blue Business® Plus Credit Card from American Express: 2x Membership Rewards points on the first $50,000 in purchases each calendar year; 1x Membership Rewards points on purchases after that ($0 annual fee, see rates and fees)
- Citi® Double Cash Card: Up to 2% cash back on all purchases, given as 1% when you buy and 1% as you pay; you can transfer cash-back rewards to ThankYou Rewards points if you have a card that earns Citi ThankYou Rewards ($0 annual fee)
Remember that several of these cards offer modest welcome offers after $1,000 or less in spending. In particular, it could make sense to sign-up for the Chase Freedom Unlimited or the Amex Everyday Preferred to earn the welcome offer and get elevated earnings on spending that earns just 1x or 1% with most cards.
Click through a shopping portal
Before making any purchase online, you should consider whether you can earn extra rewards by clicking through an online shopping portal. By clicking through an online shopping portal, you can earn extra points, miles or cash back on your purchase. Note, these rewards are on top of what you’ll earn on your credit card when you make the purchase.
Unless you have a particular reward type you’re looking to earn, I recommend using a shopping portal aggregator. After all, not every shopping portal covers every merchant. And, different shopping portals offer different rates of return. But, by using a shopping portal aggregator such as Cashback Monitor or Evreward, you can find the best return.
If you can purchase a specific gift from multiple merchants, it’s worth price comparing across the merchants and checking each merchant in your favorite shopping portal aggregator. After all, doing so can save you money and earn you extra rewards.
Many online shopping portals offer special bonuses during the holiday season. Here are some current options:
- American Airlines AAdvantage eShopping: Earn up to 4,000 bonus miles (Earn 500 bonus miles when you spend $100; earn 2,000 bonus miles when you spend $500; earn 4,000 bonus miles when you spend $1,000). Offer valid through Nov. 22, 2020.
- Alaska Mileage Plan Shopping: Earn up to 1,500 bonus miles (Earn 300 bonus miles when you spend $100; earn 750 bonus miles when you spend $300; earn 1,500 bonus miles when you spend $500). Offer valid through Nov. 22, 2020.
- Southwest Rapids Rewards Shopping: Earn up to 3,500 bonus points (Earn 500 bonus miles when you spend $100; earn 1,000 bonus miles when you spend $500; earn 3,500 bonus miles when you spend $1,000). Offer valid through Nov. 22, 2020.
- United MileagePlus Shopping: Earn up to 5,000 bonus points (Earn 500 bonus miles when you spend $100; earn 2,500 bonus miles when you spend $500; earn 5,000 bonus miles when you spend $1,000). Offer valid through Nov. 22, 2020.
When using a shopping portal, be sure to register for the portal. Then, log in to your account and click on the retailer where you want to shop. Complete your transaction in the window that you opened from the shopping portal to ensure your purchase tracks correctly.
Buy and use gift cards
Another way to maximize your holiday purchases is to buy gift cards and then use them to make your purchase. Although this might seem like an unnecessary extra step — and it takes away the ability to rely on credit card shopping protections for your holiday purchases — you can often earn a lot more rewards.
As I noted above, most of your holiday gift purchases are likely from merchants that don’t fall into the bonus categories on your credit cards. But merchants who sell gift cards, such as grocery stores and office supply stores, often earn bonus points. So, you may be able to boost the earnings on holiday shopping by purchasing gift cards and then using these gift cards to do your holiday shopping.
For example, you might want to use the no-annual-fee Ink Business Cash Credit Card to purchase gift cards at an office supply store. This card earns 5% cash back on the first $25,000 spent in combined purchases each account anniversary year at office supply stores and on internet, cable and phone services. If you also have a card that earns Chase Ultimate Rewards, you’ll effectively earn 5x Ultimate Rewards points (which equates to a 10% return based on TPG’s valuations). This type of return is much better than you’d receive on even the best everyday spending card.
Take advantage of discounts
There are various other ways to earn extra rewards or obtain discounts that can put money back in your pocket for your next trip.
If you have one or more American Express cards, it’s worth checking your Amex Offers before you start shopping. You’ll usually get different Amex Offers on different cards, so it’s worth checking the offers on each of your cards. You can only enroll in a specific offer on one card, though. But, you can stack Amex Offers for cash back and bonus points if Amex happens to give you stackable offers.
Chase, Bank of America and Wells Fargo also offer programs similar to Amex Offers: Chase Offers, BankAmeriDeals and My Wells Fargo Deals. I’ve found these programs to be less valuable than Amex Offers since they generally show fewer deals on my cards. But, if you have Chase cards, Bank of America cards or Wells Fargo cards, it’s worth checking your offers before you start shopping.
Finally, if you have a Visa business card, you should enroll in the Visa SavingsEdge program. I once got a 5% statement credit on a Lenovo laptop purchase through this program when I used my enrolled Ink Business Preferred Credit Card. So, if you’re eligible, it’s worth enrolling in the program and checking out the Everday Offers as well as the Activate Offers.
Leveraging holiday shopping for a free vacation
The headline promised I’d show how holiday shopping could lead to a free vacation. So, let’s consider three different ways you might be able to get a free trip with various holiday shopping budgets.
$500 shopping budget
Let’s assume you already have the Chase Sapphire Preferred Card and decide to apply for the Chase Freedom Flex for your holiday shopping. Once you get your new card, you activate 5% cash back on up to $1,500 in combined Paypal and Walmart purchases for this quarter. Then, you do all $500 of your holiday shopping at Walmart before the end of 2020.
In this case, you’d earn the Freedom Flex’s $200 sign-up bonus as well as $25 of cash back on $500 of Walmart purchases. You could use the cash back to cover $225 of vacation expenses, which may be enough to fuel an inexpensive weekend trip.
Or, since you have the Chase Sapphire Preferred, the $225 of cash back could become 22,500 Chase Ultimate Rewards points. There are a lot of ways to use Chase Ultimate Rewards points. But, I’d likely transfer 20,000 Ultimate Rewards points to World of Hyatt to book four free nights at a Category 1 World of Hyatt property such as the Hyatt House Colorado Springs.
$1,000 shopping budget
For this example, let’s assume you’ve gone all-in on Ultimate Rewards and have the Chase Trifecta. But, let’s assume you don’t want to apply for a new card this holiday season. So, you’d have the Chase Sapphire Reserve, Ink Business Preferred Credit Card and Chase Freedom Unlimited to choose from for your holiday spending.
For ease, let’s assume you use the Ink Business Preferred to buy a new $1,000 laptop from Lenovo. Assuming you’ve enrolled in Visa SavingsEdge, you’ll get a 5% statement credit for your Lenovo purchase, which equates to $50. And, let’s assume you used Cashback Monitor to find the best shopping portal.
When I wrote this guide, you could earn 2x Ultimate Rewards points on your Lenovo purchase. But, you could also earn 7% cash back — or 7x Membership Rewards points — through Rakuten. I’ll assume you clicked through Rakuten to earn $70 of cash-back rewards.
Finally, the Ink Business Preferred earns 1x Ultimate Rewards points on electronics purchases. Although it isn’t one of the best cards for electronics purchases, you’ll find that the 5% Visa SavingsEdge credit is worth more than earning 0.5x more Ultimate Rewards points with the Chase Freedom Unlimited. Using the Ink Business Preferred for this purchase, you’d earn 1,000 Ultimate Rewards points.
So, in this case, $1,000 in holiday shopping could net you $120 of cash back and 1,000 Ultimate Rewards points. These Ultimate Rewards points are worth $20 according to TPG’s valuations, but you could also redeem these points for $15 of travel booked through the Chase Ultimate Rewards Travel Portal.
But, earning about $140 of rewards from $1,000 of holiday shopping without signing up for a new credit card is pretty awesome. I’d likely use the cash back to pay for a local staycation or weekend rental car.
$5,000 shopping budget
Finally, let’s assume you apply for The Platinum Card from American Express. In this case, you could earn the card’s 75,000-point bonus after you complete $5,000 of holiday shopping (within the first six months of account opening).
You could earn 10x points at U.S. gas stations and U.S. supermarkets on up to $15,000 in combined eligible purchases during your first six months of card membership. However, according to the card’s terms and conditions, Amex explicitly excludes gift cards from 10x earnings. So, let’s assume that all $5,000 of your holiday shopping earns 1x points.
You’d have 80,000 Membership Rewards points after you finish your holiday shopping. Of course, you could click through online shopping portals to earn bonus rewards. And, you might be able to snag some Amex Offers to boost your earnings. But, for ease, let’s consider what type of vacation 80,000 Membership Rewards points could provide.
You can check out the best ways to use 75,000 American Express Membership Rewards points and five fantastic ways to use 60,000 Membership Rewards points for your next trip for inspiration. One appealing option is round-trip flights to Hawaii from the West Coast U.S. for 26,000 Avios round-trip per person. 80,000 Membership Rewards points are even enough to book flights for three travelers.
You won’t have any points left for lodging if you travel with two companions. But, if you travel alone, you would have 54,000 points left for lodging. You could transfer these points to book award nights with Choice Privileges, Marriott Bonvoy or Hilton Honors. The transfer ratio is 1:2 for Hilton Honors, so you could transfer 54,000 Membership Rewards points to 108,000 Hilton Honors points, which would be enough for two nights at several Hilton properties in Hawaii.
It’s possible to work toward your next vacation — or even earn enough rewards to fund an entire trip — by maximizing your holiday shopping purchases. Especially if you’re able to sign-up for a new card and earn the welcome bonus while making holiday purchases, it’s easy to rack up enough rewards for a trip.
However, even if you don’t want to apply for a new card this holiday season, it’s still possible to maximize your spending. Specifically, you’ll want to use the right card, look for discounts, click through shopping portals and consider when to purchase gift cards.
Featured image by Tashdique Mehtaj Ahmed/Getty Images.
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