Updated on 11.08.16

The Right Way to Use Your Credit Cards This Holiday Season

Michael Gardon

If you tend to spend more this time of year, it's easy to take advantage of credit card signup bonuses and other reward offers.

For most of us, the arrival of the holidays signals an uptick in spending. Presents for family members and travel expenses on the way to Grandma’s house add up quickly. One way I lessen this burden is by using my holiday spending to top off the rewards points and miles I’ve earned on my credit cards throughout the year.

However, different cards yield different benefits. For instance, my primary card is the Chase Sapphire Preferred® Card, but right now, I’m doing all of our holiday Amazon shopping with the Chase Freedom® card because it has no annual fee and offers a great deal.

With this card, I earn 1% cash back on every purchase, but I also earn 5% cash back on certain spending categories, which change every quarter. However, from Nov. 23 to Dec. 31 of this year, anything I buy from Amazon.com on my Freedom card will net me 10% cash back on up to $1,500 worth of purchases. My current quarterly bonus reset on Nov. 23, so I could fully utilize the promotion.

Plus, because I use Chase Freedom® and the Chase Sapphire Preferred® Card, I can transfer these extra bonus points to my Chase Sapphire Preferred® Card points balance. That way I get way more value out of the points for travel.

Hunting for Bonuses

The holiday season is a great time to take advantage of credit card signup promotions, because most of them come with minimum spending requirements. If you’re spending for the holidays, what better way to meet a minimal spending barrier than putting all of your holiday shopping toward a hefty helping of cash-back points or airline miles?

Chase Sapphire Preferred® Card, my daily card of choice, currently runs a promotion that offers 50,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That’s $625 in travel when you redeem through Chase Ultimate Rewards®.

The great thing about this card is its versatility. You’re not just earning double points on travel and restaurant purchases. You also save 20% on travel costs booked through Chase Ultimate Rewards — with those points being fully transferable between Chase’s many partners.

Another great holiday card is the Discover it card, which offers 5% cash back on purchases from Amazon and participating department and clothing stores until the end of December. This card carries no annual fee, and if you grab it this month, you can leverage it for the next two holiday shopping seasons.

After 12 billing cycles, Discover adds up all the cash-back you earned over the year and gifts it to you — essentially doubling your cash back for a whole year. If you pay attention to the quarterly categories, those earnings can really add up — well into the hundreds of dollars, simply for using the right card at the right time.

The card you choose depends on your goals. The best credit cards offer various benefits for customers’ specific needs. Do you want to spend less in general, delay interest, get a year-long card, or receive better benefits at one specific store? One card doesn’t fit every customer, so plan your goals before choosing the one that’s right for you.

Advice for Happier Holidays

After you pick the right credit card, use it to its full potential by following these three tips:

1. Be leery of flash deals. Black Friday and other short-term saving periods aren’t all they’re cracked up to be. Sure, some of the deals are nice, but many times, retailers make a big show of savings that aren’t actually that impressive compared to their normal discounts.

The best thing you can do is purchase your presents throughout the year when you spot an abnormally good deal. That’s not always easy to do, however, and the holidays are already upon us. If you waited until the last minute this year, don’t jump at the first tempting deal you see. Compare prices between retailers to make sure you’re really getting the best deal, and remember that a sale only saves you money if it’s something you were going to buy anyway.

2. Search for coupon codes. If you see something you like and plan to buy it, take a few seconds to search for coupon codes from the item’s retailer or manufacturer. It takes almost no time, and many websites dedicate themselves to compiling all of the holiday coupons in one place. A quick Google search could save you 10%-20%.

3. Shop through rewards portals. Major credit card platforms like Chase Ultimate Rewards and American Express Membership Rewards have online partnerships with merchants that allow you to use points to purchase gifts — often at discounted prices. You can also use these portals to find member-exclusive savings that won’t show up on regular store webpages. Likewise, Discover cardholders can earn extra cash back at some online retailers if they shop through Discover’s portal.

Don’t just watch your money fly out the door this holiday season. Leverage your credit cards wisely so you can spend a little, save a little, and earn rewards for next year.

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