The holiday shopping season — believe it or not — will soon be upon us. (Last year, retailers started rolling out Black Friday sales well before Thanksgiving.)
But if you haven’t paid off your back-to-school expenses and are worried about financing your family’s wish list this year, here’s something to keep in mind: Credit card rewards can help fund those purchases.
“If you are using your cards wisely and saving up your points and planning ahead, it can definitely benefit your budget [to redeem points] in a way that suits your spending,” says consumer savings expert Andrea Woroch.
Fortunately, there’s still time to build up your rewards coffer. Here’s how to maximize points, miles and cash back ahead of December:
1. Review your rewards program.
“There are all these little nuances” you may not be aware of that allow you to maximize earning potential, says budgeting expert Tiffany Aliche, a U.S. News My Money blogger. For instance, “you might get six times the points using [a card] at a certain gas station,” she says. Or a card may feature revolving bonus categories that you have to sign up for to earn.
You’ll also want to familiarize yourself with program caveats:
— Are there caps on your points?
— Do miles expire?
— Are all redemption options equal?
Understanding these ins and outs will help you earn faster and ensure you don’t waste any precious points or miles.
2. Use the card for everyday expenses.
For instance, buy groceries with a card that offers extra points (think 2 to 5 percent) back at the supermarket. Or leverage a restaurant rewards credit card while out for a meal with your friends. “Everyone can pay you the cash, and you can put the dinner on your account,” Woroch says.
3. Shop your issuer.
Many banks or credit card companies have online shopping malls tied to their rewards program that allow you to earn extra points on purchases from partnering retailers. These malls “have a lot of specials and double-bonus [offers],” says Beverly Harzog, consumer credit expert and author of “The Debt Escape Plan,” so consider browsing them for items you were already looking to buy.
Remember, though, when it comes to all purchases, “you want to rack up the points, but not the debt,” Aliche says.
4. Manage your payments.
Revolving a balance essentially renders rewards points moot, so you’ll want pay all your purchases off on time. To ensure you do so, “pay your bill twice in that month so you can keep your balance lower,” Harzog says.
Making multiple payments is a great way to earn rewards while staying on budget. Alternately, swipe your card and transfer the money immediately from a linked debit card account or banking app, Aliche says.
5. Look for alternative rewards sources.
Many credit cards pair with airline or hotel loyalty programs that allow you to pool points and maximize redemption options. These partnerships can serve as a means to fund holiday travel. As Harzog points out, “the holiday season gets very expensive outside of gift-buying.”
There are also a few free retailer rewards programs that can help you earn some extra dollars and curb costs, even if they don’t combine directly with your credit card’s rewards program.
6. Scout for a sign-on bonus.
To attract new cardholders, issuers will offer extra points, miles or cash back when new customers sign up for a card. These offers are beneficial for racking up big rewards in a short period of time.
However, don’t sign up for every card that touts extra points or miles. For starters, you’ll likely go over budget, given issuers typically require you spend a certain amount of money in a specified period to qualify. Second, each credit card application will generate a hard inquiry on your credit report and could, subsequently, hurt your credit score.
To mitigate these effects, check to see if your credit can handle a hit. Then settle on a single credit card with a competitive sign-on offer that’s right for you. If there’s no sign-on bonus attached to a card you are interested in, contact the issuer to ask if one is in the pipeline.
“Sometimes you have to call to see what the special promotions are,” Woroch says.
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6 Ways to Maximize Credit Card Rewards for Holiday Shopping originally appeared on usnews.com
