Personal Finance

4 Smart Ways to Use Your Credit Cards for Holiday Shopping

With Daylight Saving Time over, the air getting crisper, and grocery stores ordering turkeys by the truckload, it’s becoming clear that the holiday season is just around the corner. In a few short weeks, the 2017 shopping season will officially commence — and many of us are already preparing our wallets accordingly. Of course, just because this season is all about giving doesn’t mean you can’t get rewarded as well.

As it turns out, when done properly, you can save a significant amount of money just by utilizing your rewards credit card during your gift shopping. With that in mind, here are four smart ways to get the most out of your credit card this holiday season.

Don’t overspend!

Obviously this is a disclaimer that must lead any discussion involving credit cards and holiday spending. All too often you hear horror stories about people using credit cards to finance their various gifts, only to put themselves into financial turmoil as a result. To avoid this from happening to you, be sure to create a holiday budget and stick to it. Remember: the rest of these tips will only make monetary sense if you are able to pay off your balances the following month and not be charged interest on your purchases.

Know your credit rewards

If you’re like many Americans, you probably have a few different credit cards to choose from when it comes to holiday shopping. However, do you truly know what the benefits of each card are? In terms of maximizing your savings and getting the most out of your spending, it’s important to plan ahead and know which card is right for each purchase.

For example, some credit cards have rotating categories that will earn you bonus cash back. Additionally your card issuer may offer special deals in partnership with select retailers that you’ll want to activate before shopping. With that in mind, be sure to not only make a master list of which card is best for every type of purchase but also double check your issuer’s deals section before swiping (or inserting the chip on, as it were) your card.

Cash in rewards for gift cards

Speaking of credit card rewards, the holiday season may be the perfect time to cash out some of your earnings. In fact, with many cards, you may be able to exchange your cash back savings for a variety of gift cards. These can either be given directly to your friends and family as gifts or used to subsidize your purchases. Also be on the lookout for special offers that might give you more for your money like the discounted gift cards that some issuers boast.

Consider a new credit card

Not getting any rewards from your credit card? Assuming your credit is in order, perhaps it’s time to get a new card that offers you cash back, travel miles, or other perks. After all, having such a card in your wallet will come in handy during the holiday season and beyond. As I mentioned, these types of cards may only be available to those with preferred credit so be sure to check one of the many free credit score sites ahead of time so you know where you stand.

Holiday shopping doesn’t need to (and shouldn’t) bust your budget. While some splurge-prone shoppers might shy away from credit cards around this time of year, the truth is that they can actually be great tools for saving money and rewarding you during your holiday gift buying. Just be sure to stay in your budget, plan ahead to maximize your rewards, utilize gift cards, and consider getting a new card if yours isn’t up to snuff in the rewards department. Happy holiday shopping!

Also published on Medium.

Other Articles by Jonathan Dyer