Using Your Credit Card to Maximize Holiday Shopping

November 15, 2012
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Now that November has arrived, shoppers and retailers are both turning their attention to the holiday season.

Consumers will spend an average of $749.51 on their holiday shopping, up 1.2 percent from the $740.57 spent last year, according to the National Retail Federation.

Shoppers can save money by using their rewards card to help pay for holiday shopping.

“Credit card issuers are still using generous rewards and bonus offers to attract attention to their card. However, most offers now come with spending requirements that make you purchase a certain amount in a specified time period in order to get the bonus,” says Bill Hardekopf, CEO of LowCards.com. “If you pay off your balance each month, this shopping season is a great time to earn extra rewards. But if you can’t afford to pay off your balance in January, forget about rewards and use cash or the credit card with the lowest rate.”

Here are some tips for making the most of your credit cards during the holidays:

1. Use your reward points as currency to buy gift cards or merchandise offered through partner programs. The programs vary by issuer, but the partners could be stores where you already shop. Discover turns $20 rewards into $25 gift cards for AMC Theatres, Bed Bath & Beyond, and many national clothing retailers. Citi gives an additional one to five percent cash back when you shop at their over 400 retail partners. The Citi ThankYou card has a $50 gift card for Fandango or iTunes for 5,000 points, or a $25 Olive Garden gift card for 2,500 points. American Express offers a $100 Amazon gift card for 18,000 points. Capital One is adding bonus rewards for purchases made from November 25-28 with some retail partners in its online shopping portal, Perk Central. Some retailers include: LandsEnd.com (100 percent rewards increase), Macys.com (40 percent rewards increase), Lego.com (100 percent rewards increase) and GameStop.com (40 percent rewards increase).

2) Look for five percent rotating cash back offers. Chase Freedom, Discover More and Citi Platinum Select offer an attractive five percent back on spending in designated categories during a certain period of time. The October-December bonus categories for these issuers focus on shopping and entertainment. If you have these cards, remember to sign up for these attractive rebate offers each quarter since enrollment is not necessarily automatic.

3) Check for cash back bonuses on new accounts. A number of cards offer up-front cash back bonuses to new cardholders, and the increased spending during the holidays are the best time to quickly reach these spending tiers and earn additional  cash. In nearly every case, the consumer needs to spend a certain amount of money on the card during the first three months of being a cardholder. Examples of cards with up-front bonuses include Chase Freedom ($100 bonus if $500 is spent within three months), Capital One Venture One (10,000 miles if $1,000 is spent within three months), Citi Dividend Platinum Select ($100 bonus if $500 is spent within three months), BankAmericard Cash Rewards ($100 bonus if $500 is spent within three months) and Blue Sky from American Express ($100 statement credit if $1,000 is spent within three months).

4) Pay attention to reward limits. Some cards have a limit on the bonus. As an example, the Discover More card offers five percent cash back but only on the first $300 in purchases each quarter. After you reach the rewards limit on one card, stop using that card and switch to another card in order to maximize your rewards.

LowCards.com simplifies the confusion of shopping for credit cards. It is a free, independent website that helps consumers easily compare credit cards in a variety of categories such as lowest rates, rewards, rebates, balance transfers and lowest introductory rates. It also gives an unbiased ranking and review for each card. The LowCards.com Complete Credit Card Index is the most objective and comprehensive resource on the Internet which allows consumers to compare rates for over 1000 credit cards offered in this country. Created by Hampton & Associates, the company has been analyzing the credit card industry and supplying objective websites on various consumer expenses for twelve years.

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One Response to Using Your Credit Card to Maximize Holiday Shopping

  1. jan m on November 15, 2012 at 1:06 pm

    Thanks for the info on bonus reward limits. I have a chase freedom and was looking at getting a discover card, but with a 5% back limit on only $300/quarter it doesn’t seem worth it. Chase freedom 5% is on $1500/quarter. I charge everything I can…even 1% cash back on simple things like cable/phone, utilities adds up (as long as there isn’t a convenience fee).

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