Do credit cards and the holidays spell trouble for you? Credit cards and holiday spending can be a dangerous combination – but it doesn't have to be. Look at your credit cards as financial tools that can help you save money as well as spend it.
Here are seven ways to use credit cards to increase your holiday savings.
1. Lay Out Your Holiday Credit Budget – A budget is the key to prevent overspending – and it's also the way to avoid approaching your credit card limit. Maxing out a card will not only harm your credit score, it also increases the chances you'll carry a balance. Save on interest charges by keeping balances low – or eliminating them entirely. You can check your credit score and read your credit report for free within minutes by joining MoneyTips.
2. Maximize Rewards with Your Purchases – What's your card's reward structure? Check for tiered rewards or rotating categories that increase rewards for certain types of purchases (gas, travel, groceries, etc.) or for shopping with specific retailers. Tailor your purchases to your rewards program as much as possible but avoid the temptation to overspend – or buy things you don't need – just for extra reward points.
3. Redeem Existing Rewards – If you've already earned useful rewards, why not redeem some over the holidays? Consider redeeming rewards for gift cards or merchandise that you can use as holiday gifts. How about cashing in airline miles for holiday travel purposes? By redeeming rewards strategically, you can avoid excessive holiday expenses.
4. Look for Partnership Deals – Your card issuer may offer extended lucrative deals through partnerships. For example, the Capital One Venture and VentureOne cards offer 10X miles on hotel expenses that are booked and paid through their partner Hotels.com – well over their respective 2x and 1.25X miles rewards.
5. Look for Rebate/Price Refund Programs – These can be separate rebate companies such as Ebates or offers through your credit card issuer. Citi's Price Rewind searches certain online merchants for lower prices on your purchases made with a Citi card, and refunds any price difference found within sixty calendar days of the purchase. Discover, Capital One, and Barclays offer similar price protection programs on certain cards.
6. Combine Credit and Banking Deals – Many banks set up special deals or reward multipliers for credit card customers who also have checking or savings accounts there. Check for special deals through your card issuer's websites or mobile app – such as Bank of America's BankAmeriDeals. Online banking customers can select their preferred deals on the portal and receive cash back when they use an eligible Bank of America credit or debit card. Preferred Rewards Customers can increase their rewards by up to 75%.
7. Look For Alternate Card Offers – If your credit card rewards don't stack up to current offers, consider switching to a new card. Promotional offers often feature an introductory 0% annual percentage rate (APR) on purchases, lucrative sign-up bonuses, and other useful perks. With a balance on your existing card, look for balance transfer offers that offer minimal fees and/or 0% APR on your transferred debt.
The secrets to holiday savings with your credit card are planning combined with research and effort. Plan your purchases wisely. Research every savings program and perk that your card issuer offers and take full advantage of them while staying within your budget. If your card issuer can't come up with reasonable offers, replace them with one who can.
Follow those general guidelines and sail through the holiday season with limited debt and the satisfaction of knowing you maximized your credit card savings.
If you want more credit, check out our list of credit card offers.
Disclaimer: The editorial content on this site is not provided by the companies whose products are featured. Any opinions, analyses, reviews or evaluations provided here are those of the author's alone, and have not been reviewed, approved or otherwise endorsed by the credit card issuer(s). This content was accurate at the time of publication, but card terms and conditions may change at any time. This site may be compensated through the credit card issuer affiliate program.