Budgets and Money

3 Tips for Getting the Most Out of Your Credit Cards This Holiday Season

As you prepare your holiday budget, use these tips to get the most out of your credit cards.

Get the most out of your Credit Card with these 3 Tips

Credit Card Tips for Holiday Rewards and Bonuses

The holiday shopping season is in full swing. That means you're probably taking a hard look at your budget, trying to figure out a way to stretch your cash so you can afford to buy all the treasures on your family's holiday wish list.

If you're looking to increase your spending power this year (and who couldn't use a little extra cash during the holidays), one way is to take full advantage of special credit card promotional offers and to maximize your stash of cash back reward points. Here are three tips:

1. Take advantage of instant sign-on bonuses.

If your credit is in good shape and you've considered applying for a new credit card, the holiday season can be one of the best times to open a new account. The fact is, credit card companies are competing for your business. For this reason, many are willing to give you some pretty sweet sign-on bonuses during the holiday season such as an instant cash reward or even hundreds of dollars' worth of pre-paid gift cards - just for signing up. A good place to compare over 1,700 different credit cards side by side is on Nerdwallet.com.

2. Use zero interest to your advantage.

This time of the year, many credit card companies run offers of zero interest for six or even 12 months. That means you can potentially borrow the money you need for your holiday shopping without paying a dime of interest. For example, if you open an account with a $1,000 limit and no interest for the next 12 months, then budget for paying at least $83.33 per month on your new account. However, be sure that you keep a close eye on your account. Once the special promotional rate comes to an end, interest rates can increase substantially.

3. Cash in your rewards via the company's rewards portal.

Today, many credit card companies offer a higher level of cash back reward points for purchases that are made in certain categories and for everyday purchases. For this reason, cardholders may have racked up a nice stockpile of points over the course of a year. But wouldn't it be great to get an extra bonus on your reward points - kind of a discount on top of a discount? Well, in many cases you can. Instead of just cashing in your points, check out your credit card company's online shopping portal. Today, many retailers have partnered with credit card companies and are happy to provide you with some deep discounts just by doing your shopping through the credit card company's rewards portal. These online “malls” are not only convenient in that you can shop from home, but any discounts that are available are immediately applied to your purchase.

Using your credit cards to your advantage and maximizing your credit card's rewards can be a strategic way to put more spending power in your wallet during the holidays. However, be sure to set and stick to a budget and always carefully review the terms in the cardholder agreement. The last thing you want to do is get yourself into a debt situation that, once the holidays are over, puts a damper on the New Year.

Also, always keep in mind that using a credit card is a form of borrowing and there are risks. If you don't pay off your balance each month, you'll accrue interest. This can be especially troublesome if you only pay the minimum amount due every month. Therefore, it's best to think of your credit card only as a short-term financial transaction.

We hope you find this information helpful. If you'd like more holiday budgeting tips, be sure to visit the Protective Learning Center.

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All Learning Center articles are general summaries that can be used when considering your financial future at various life stages. The information presented is for educational purposes and is meant to supplement other information specific to your situation. It is not intended as investment advice and does not necessarily represent the opinion of Protective Life or its subsidiaries.

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