Don’t expect Black Friday and Cyber Monday to be one-day events this year. With retail stores struggling and consumer prices up by more than 6% from last year, expect to see extended sales, month-long holiday specials, and long waiting periods for home electronics. You can take advantage of these if you shop carefully, but you’ll also need to use the right credit card.
If you’re looking for more shopping bandwidth, apply for a balance transfer credit card and move some of your existing balances over. This could also cut your interest rate since most balance transfer cards offer a low APR to get you onboard. Once that’s done, review the benefits of your existing cards. Here’s a list of what you’re looking for:
1. Cashback Credit Cards
Credit cards that offer cashback for every purchase are a great option when you are holiday shopping. According to a recent survey published by CNBC, holiday shoppers plan to spend up to $276 per family member this holiday. At 5% cash-back, which is available on many cards right now, that’s a cool $13.80 back in your pocket for each spouse, child, or parent you buy for.
2. Rewards Credit Cards
Cashback is just one form of reward offered by credit card companies. You can also accumulate points, which can then be redeemed for gift cards or merchandise. These points can also be applied to your statement balance in some cases, essentially making them a cashback reward. Review your credit card contracts carefully to see what’s available to you.
3. Travel Credit Cards
If you travel a lot, using your travel credit card for holiday purchases could earn you rewards at hotels, airlines, and resorts. These cards also often include rental car rewards and credits for Global Entry or TSA pre-check. You’ll need to pay for those things anyway, so building up those travel points is never a wasted effort. You could even book a vacation as a gift for your loved one.
4. Store Credit Cards
Store credit cards charge high-interest rates, so they’re not the best choice for holiday shopping. On the other hand, some stores also offer discounts when you use their card. Weigh the discount against the additional cost of making your purchase with a store card. Your best option is to use the card, secure the discount, and pay the balance in full at the end of the month.
5. Low-Interest Credit Cards
Some consumers can’t be bothered with checking for rewards points or shuffling through their wallets for the right credit card. If you’re going to use just one card for holiday shopping this year, choose the one with the lowest interest rate. You could also use your debit card, which has no interest rate at all. In other words, just pay cash.
The Bottom Line: Every Purchase is Situational
Those who truly want to save money this year should treat each purchase as a situational decision. Weigh the benefits of getting cash back, rewards points, travel rewards, store discounts, or a low-interest rate. These will not be the same for every purchase. Take your time, start shopping early, and make the decision that saves you money.
I am Tristan who loves to ride and spend time with my jenny (horse) and my love Mark. After completing my graduation, I have been working as an accountant in a private firm in Cologne.
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