5 tips to maximize rewards and avoid debt this holiday shopping season
The holiday season, while often filled with joy and celebration, can also bring financial stress as consumers navigate the pressures of gift-giving and festive expenses. To help mitigate this strain and maximize credit card rewards, the TPG team has compiled five essential tips for savvy holiday shopping. The first step is to create a comprehensive plan and budget. By mapping out who you need to shop for and setting a spending limit, you can avoid the pitfalls of impulse buying that can lead to overspending. Utilizing tools like spreadsheets to track your budget, along with links to desired gifts, can streamline the process and keep your finances in check. Additionally, it’s crucial to account for extra costs associated with holiday gatherings, such as increased grocery and dining expenses.
Moreover, leveraging credit card perks can significantly enhance your holiday shopping experience. Many rewards cards come with valuable benefits, such as statement credits or exclusive offers at popular retailers. For instance, the American Express Platinum Card® offers a $50 statement credit for Saks Fifth Avenue twice a year, which can be particularly useful for purchasing luxury gifts. Utilizing shopping portals is another smart strategy; by making purchases through these portals, consumers can earn bonus points or cash back. Major airlines and third-party services like Rakuten provide platforms where shoppers can accumulate rewards on their purchases. Additionally, opting for cash-back credit cards, such as the Citi Double Cash® Card or Chase Freedom Unlimited®, can provide immediate financial benefits, allowing you to earn cash back on everyday purchases.
Finally, for those looking to finance larger holiday purchases, many credit cards offer 0% introductory APR periods that can help spread the cost over time without incurring interest. This approach, paired with structured payment plans offered by issuers like Amex and Chase, can provide a more manageable way to handle holiday expenses. By following these strategies—setting a clear budget, utilizing credit card perks, exploring shopping portals, and considering cash-back options—you can enjoy the holiday season while minimizing financial stress and avoiding debt in the new year.
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.
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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 a
$50 Saks Fifth Avenue statement credit
that you can use each half of the year (up to $100 statement credit annually; terms apply; enrollment required). This is a great perk to use for pricier, luxury gifts.
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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.
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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
rates and fees
) 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
rates and fees
) 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.
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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
Editorial disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airline or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.
