Is it too soon to start planning your end-of-year holiday events? That may be debatable but we all know how quick retailers are to taking advantage of increased sales brought on by holiday shoppers. With Thanksgiving just around the corner most retailers are already advertising for their big shopping events and Black Friday deals. If you, like many others, choose to take advantage of these great deals then you’ll also want to plan ahead.
The biggest temptation during the holiday sales events is to break out the credit cards in order to take advantage of the great deals while they’re available. You might be saving a lot of money on the special deals but if you’re not careful, your credit card costs could end up making those purchases cost much more than they’re worth. That’s why you need to take precautions when using credit cards for holiday purchases. Here are six ways to make the most of your credit cards during the holiday season:
1. Sign Up for a Cash Back Card
For those of you who are not already heavily invested in a specific travel rewards program, you may be better off using a cash back rewards card. For new cardholders you may be able to get a bonus cash back offer when you sign up. If you do plan on signing up for a new card with a cash back deal, look for an offer that gives you a higher cash back percentage (as much as 5 percent) on popular retailers such as Walmart, Target, or even Amazon.
Just keep in mind that you should only choose a cash back or rewards card over a zero or low-interest card if you are able to pay your monthly statements in full. Otherwise it would be better to find a card with a zero-interest introductory rate or low-interest card as it would save you the most in the long run.
2. Activate Your Bonus Purchase Opportunities
Many rewards cards will feature rotating bonus categories which you may need to activate or choose each quarter. If your card does have rotating bonus opportunities, make sure that you log in each quarter to activate. Also bear in mind that many of these rewards may have a limit on how much you can earn so keep track of your purchases and switch cards once you’ve reached the limit.
3. Learn About Shopping Portals
Unknown to many rewards cardholder is the opportunities available from shopping portals. Many loyalty programs and credit cards now offer online shopping portals which will allow you to earn extra points, miles, or cash back from your purchases.
These online shopping portals often feature some of the top national retailers and can usually pad your purchase rewards with extra points per dollar spent. With most airline and hotel loyalty programs, they will likely have their own portals as well. Using these websites can help you stack your rewards earning potential.
4. Examine Your Cardholder Benefits
Holiday shopping often features large purchases on items you wouldn’t normally buy unless they are heavily discounted – which is often the case during Black Friday sales events. For those bigger purchases, you may want to consider your cardholder benefits. May credit cards include benefits such as accidental damage and theft protection, extended warranties, price and return protections. These benefits can come in handy when making a large purchase, such as a new TV or computer.
5. Decide if it’s Worth Getting a Store Credit Card
If you don’t already have a great rewards or low-interest card, you may want to consider getting a store credit card. It is likely that any of the major stores that you plan to shop at during the holiday season will offer their own branded credit card. These cards should never be an impulse sign up though. You should always find out in advance if it’s worth considering.
Most of the retail credit cards will feature a very high interest rate so it is important that you consider their terms and conditions and quality of rewards programs before deciding.
6. Consider an Interest-Free Promotional Financing Offer
It is not uncommon for American shoppers to spend “too much” during the holiday season in order to take advantage of special savings and offers. That is all well and good if you are able to pay off your credit cards in a timely manner but if not, you could end up pay more in interest than the savings you earned from the discounts.
If you are unsure whether you’ll be able to pay off your credit card balances within a few months, you may want to consider opening a card with a 0 percent APR offer for new purchases. These offers allow you to avoid interest charges for six to 18 months. Just make sure you don’t keep a high balance on your card for too long as it can negatively affect your credit score.
For more financial advice and credit repair assistance, contact Credit Absolute.