How to Maximize Your Credit Card Rewards This Holiday Season

In a time of year when expenditures can easily go unchecked, an astute use of your credit card rewards program can bolster your spending power and enable you to enjoy the comforts and joys of the season with fewer hits to your wallet. Capitalizing on your credit card rewards can be an excellent strategy for managing your holiday budget, from buying gifts and scooping up items on your Cyber Monday wish list, to entertaining and travel. What’s more, the holidays are an auspicious time to leverage your spending into greater rewards, discounts and special deals. Experience a more abundant season with these tips on how to optimize your rewards, including ways to earn more points for your purchases, and how to get the best value when it’s time to redeem them:

If you know you can control your spending, plan to use a credit card for as many purchases as possible.

Confident that you can live within your means and avoid carrying a balance on your credit card each month? If that’s the case, reach for your credit card instead of a debit card whenever possible for all holiday-related expenses and shopping this season. Not only can you benefit from enhanced consumer protections by using a credit card, but it’s an effective way to build more rewards points. However, only take this approach if you have a solid track record for paying your balance in full every month. Don’t get overextended just for the sake of earning more rewards. If you carry a balance from month to month, the hit you’ll take in interest charges and possibly to your credit standing can quickly negate the benefits of your rewards. Keep in mind that your credit utilization ratio is the second-largest factor contributing to your credit score. This ratio measures the amount of credit you are using as compared to how much lenders have extended to you. Experts generally advise keeping your credit utilization at no more than 30 percent.

When making purchases online, use shopping portals to watch your points snowball.

If you’ve yet to discover the point-boosting power of online shopping portals made available to you by your credit card provider, now is a great time to explore them, Available exclusively to card holders, these platforms offer a wealth of opportunities to rack up additional points on holiday shopping that you were planning to do anyway. 

To earn bonus rewards through the shopping portal, you’ll just need to log in to the site, and click through to a retailer that is partnered with your credit card to make a purchase. Just a few words of caution: If you use a cash back app from a third-party provider (e.g., Payce, BeFrugal), you may not be able to earn points from both the app and an online shopping portal. In this case, you’ll need to choose which program or app will benefit you the most for that purchase.

Check out special deals available at in-store retail partners before you shop — and find out whether revolving rewards apply whether you’re shopping online or in-person.

While online shopping is a convenient and quick way to pick up additional credit card rewards, you can also earn bonus rewards at brick-and-mortar stores by shopping at merchants that partner with your rewards program. Although some credit cards offer the same rewards throughout the year, others offer bonus rewards for certain purchasing categories that change each quarter. In a time of year when you’re doing more spending than usual, knowing what the bonus categories are can help you plan effectively to rake in more rewards that can go a long way toward guilt-free shopping. However, note that there is typically a cap on the amount you can spend in a category to earn the top rewards.

Tap into your rewards for travel over the holidays.

If you’re seeking ways to fit a vacation into your holiday budget this season, or just want to stretch your travel dollars further, your credit card rewards can be an indispensable resource to tap. Many credit card rewards programs enable you to exchange your points for travel-related purchases and deals, including gift cards from major travel brands. Use them to cover all or part of your trip, including expenses such as airfare, hotel stays, cruises, rental cars, Airbnb stays, vacation packages and more. Overall, international business travel and first-class airfare tend to offer an exceptionally high value return for your points. Just be sure to pay attention to any blackout dates, and be aware that you may need to save up more points for travel rewards than other redemption options.

All else being equal, opt for redeeming points for gift cards over merchandise.

Even if you tend to dismiss gift cards as too impersonal a gift for your loved ones, there are several important reasons you may want to opt for them instead of merchandise when redeeming rewards. First, you usually get more value for your points by exchanging them for gift cards over merchandise. In general, you’ll use more points to buy an item directly from a retailer, versus redeeming your points for a gift card, and then purchasing the product. Secondly, gift cards can be a great way to offset costs if you’re entertaining this holiday or want to find a house gift for a host (think food, drinks, holiday décor, flowers, etc.)

Finally, whatever your personal feelings about giving gift cards are, they continue to be a highly popular gift to receive, and they can actually be personalized if you put some additional thought into what the person wants or needs (check out Business Insider here for some suggestions). But if you prefer, you might instead redeem you points for a gift card, then use it buy a particular item you know the person wants or needs.

Be careful not to let your points expire.

Many credit card rewards programs have a “use it or lose it” policy, so pay attention to expiration dates. It will do you no good to stockpile additional points if you’ll ultimately end up forfeiting them. In addition, be aware that you may not be able to take rewards points with you if you close your credit card account.

Reduce your bills with statement credit.

Finally, when you’ve completed your shopping this season, don’t forget that your points can be redeemed for credit on your card statement. It’s another helpful way to defray costs, recover faster from holiday spending, and start the new year in a stronger financial position!

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