If you’re not using a rewards credit card for your holiday shopping, you’re probably leaving money on the table. It’s as simple as that.
Whether you want to use rewards cards to help keep costs down or to rack up points or miles during the holiday season, it’s important that you factor these cards into your shopping plans. The good news is that, with a little bit of forethought and planning, it is pretty easy to do. Still, we all have to-do lists that are a mile long and we don’t always take the time to plan our shopping as much as we should.
[See: 12 Habits to Help You Take Control of Your Credit.]
Here are a few mistakes that rewards cardholders make during the holiday shopping season.
Not using credit card issuers’ shopping portals. Millions of Americans prefer shopping online because it is so simple. A quick visit to your favorite shopping site is far easier than loading up the car and going to some overcrowded brick-and-mortar store. However, what many folks don’t know is that if you make one extra stop on that online shopping trip, you can turbocharge your reward earnings.
Here are some examples:
— Through Chase’s Ultimate Rewards portal, you can earn an extra three points per dollar spent at Lowes.com or Macys.com — and even six extra points per dollar at Nike and Neiman Marcus.
— At Citi’s Bonus Cash Center, you can get an extra 4 percent cash back at Old Navy or 2 percent back at Walmart.com.
— Via Barclays’ online portal, you can get five points per dollar from Under Armour and 10 points per dollar at ProFlowers.com.
There are dozens of other offers at these sites and all you have to do to get them is log into card issuers’ portals, click on a link and go shopping. Once you do, those points can really pile up.
[See: 10 Easy Ways to Pay Off Debt.]
Not using holiday spending to hit a new credit card’s minimum spend. There’s never been a better time in the history of credit cards to get a sign-up bonus. We’re seeing 40,000 and 50,000 point bonuses all over the place, and some — like the Chase Sapphire Reserve — come with a 100,000-point bonus. Those bonuses alone can be worth $1,000 or more.
The trouble is that to get those bonuses, you typically have to spend $3,000 or $4,000 in the first three months. That’s not always easy to do, but it can be easier during the holidays because you’re likely increasing your spending during that time.
Here’s what you should do: Open up a new credit card, make your holiday purchases with it and use the money you’ve stashed away for the holidays to pay your card instead. That way, you’ll get closer and closer to hitting those minimum spending totals.
Those minimums aren’t always huge, by the way. The Chase Freedom card gives you $150 cash back for spending just $500. That kind of return can really make a difference to your holiday budget.
[See: What to Do If You’ve Fallen (Way) Behind on Your Credit Card Payments.]
Overspending just to get rewards. No one should ever overspend just to get credit card rewards, no matter how lucrative and exciting the rewards might be. It’s simply a recipe for disaster. In fact, if you regularly carry a balance, rewards cards probably aren’t for you. That’s because the math doesn’t work in your favor. Why, for example, would you pay 19 percent interest on a credit card to get 2 percent cash back? It doesn’t make any sense.
Before you apply for that card with the amazing sign-up bonus, be 100 percent certain that you understand how much you have to spend to get the bonus — and that you can do it. Otherwise, you’re better off passing on the offer.
More from U.S. News
9 Ways to Save When Holiday Shopping With Credit Cards
8 Ways to Maximize Your Credit Card Rewards
9 Financial Tools You Should Be Using
Don’t Make These Credit Card Rewards Mistakes While Holiday Shopping originally appeared on usnews.com
