’Tis the season to use your credit cards, but are your finances truly ready for holiday shopping?
Before hitting the malls or online sales, Wisebread.com says be sure you know your credit card options so you are earning the most rewards from your credit cards, and getting the best benefits from your holiday purchases.
Here are six things that you can do to get ready.
Sign Up for a Cash Back Card
Unless you’re already heavily invested in a specific travel rewards program, you might be better off using a cash back rewards card. Some of the best cards for holiday shopping offer as much as 5 percent back at certain department stores and retailers like Walmart, Amazon, and Target. In addition to cash rewards on purchases, many credit cards offer a bonus offer to new cardholders, which can net you several hundred dollars just for meeting the spending requirement, which is easy to do this time of year, the web site suggests.
Another option is to select a card that offers as much as 2 percent cash back on all of your purchases. With these flat-rate rewards cards you avoid having to keep up with category bonuses. However, you should only use reward credit cards if you can avoid interest charges by paying your monthly statement balances in full. Otherwise, it’s better to find a card with the lowest interest rate, the web site suggests.
Activate Bonus Purchase Opportunities
If you do choose to go with a card that features rotating bonus categories, check the terms. You may need to log-in and activate said bonus categories each quarter. Even if you activate after the quarter begins, you should receive your bonus points for the qualifying purchases you’ve already made during the quarter. Keep in mind that these bonus categories often come with limits on how much you can earn. Keep track of your purchases and switch cards once you’ve reached the limit, the web site suggests.
Shopping Rewards Portals
Many credit cards and loyalty programs offer online shopping portals that let you earn extra points, miles, or cash back from your purchases. They usually feature top national retailers, and can usually pad your purchase rewards by one or two points per dollar spent, but occasionally you’ll find deals for as much as 30 points per dollar spent. Also, many airlines and hotel loyalty programs have their own rewards portals. When you use these web sites, you can also earn rewards with your credit card, in effect stacking your rewards earning potential, the Wisebread.com suggests.
Learn About Cardholder Benefits
A great reason to using your credit card for holiday shopping is the benefits that can apply to your purchases. For example, many credit cards include accidental damage and theft protection, as well as an extended warranty policy. Other shopping benefits may include price protection and return protection. Once you know which cards offer the best benefits, you may use that as a factor in determining which new card to apply for, or which card to use for a particular purchase, the web site suggests, the web site suggests.
Should You Get a Store’s Credit Card?
Be aware that many of the stores you will visit during this busy season will undoubtedly offer you an application for a co-branded credit card. However, rather than deciding on the spur of the moment while cashing out, find out in advance if it’s worth it to have such a card, the web site suggests.
Many retail credit cards have a high interest rate. Look at the terms and conditions of the cards from your favorite retailers, and the quality of the rewards program it’s offering. Then, decide if it’s worth getting the store’s card, or if you should decline and simply complete your purchase, the web site suggests.
Consider an Interest-Free Promotional Financing Offer
If you are unsure whether you’ll be able to pay off all of your credit card balances during the holidays, think about opening a card with a 0 percent APR offer for new purchases. These offers often let you avoid interest charges on purchases for at least six months, and sometimes even 15 months or longer, the web site suggests.
Balance transfer cards can also help after you’ve spent more than you can immediately pay off, but it’s better to use an interest-free financing offer on new purchases now. Why? Because nearly all 0 percent balance transfer offers have a 3–5 percent fee, the web site suggests.