8 rewards card tricks for the holidays

credit card rewardsYou may not be able to escape spending extra during the holidays. But you can offload some of the burden onto your rewards cards.

From earning extra rewards you can use later, to taking advantage of your cards’ perks, here are eight ways to milk your cards during the holidays.

1. Harness your card’s portal

Some rewards cards have shopping portals that let you click through to partner vendors for bonus points, miles or cash back. Examples include Chase Ultimate Rewards, ShopDiscover and Barclaycard RewardsBoost.

The process is pretty seamless: Log in to your card’s portal, type in the merchant or product, click through to the retailer’s site, make your purchase and get bonus rewards automatically. Still, says David Scharfstein, who runs the blog Points on the Dollar, portals are “one of the most overlooked aspects of online shopping.”

“It’s just free money that people are leaving on the table for almost all online purchases,” he says. “It’s amazing how many stores are participating in these portals.”

Shopping portals can be an especially powerful tool during the holidays. You can use them for travel (some online travel agencies partner with portals), presents, gift cards and decor. In many cases, you’ll find that you can earn double points, but, you can often find deals for 10 points or more per dollar spent.

“Flowers and magazines are usually the two big ones,” Scharfstein says. “You can almost manufacture points that way.”

If you have multiple rewards cards, avoid the chore of logging in to multiple portals and use a portal aggregator, Scharfstein suggests. Examples include Evreward and CashbackHolic. Type what you’re looking for into the search bar and select the portal that gives you the best deal. Note that accuracy varies, and some aggregators may not include all credit card shopping portals. A newer service, a browser extension called Kard, will pull up the best offers for your cards in real time, as you shop.

2. Cut the cost of travel

Renting a car when visiting family? Quite a few cards throw in rental car insurance for no extra cost, points out John Espey, founder and CEO of Reward Summit, an app and browser add-on that helps consumers choose cards and maximize their benefits.

“You’re basically avoiding an extra $20 or $30 a day,” he says.

Staying in a hotel? Unlike some frequent flier programs (which often have limited reward availability during peak travel times), hotel programs for many major chains have this policy: As long as a room is available for cash, you can book it with the same number of points you’d use at any time of the year.

“You can get huge value from hotel rewards by using them over the holidays,” Scharfstein says.

Still facing sticker shock at the price of visiting family? It might be time to cash in some miles you earned with a generic travel rewards card, such as the Barclaycard Arrival+ or Capital One Venture. Such “miles” act as a cash-back statement against travel expenses and are often worth 1 cent each. So if you bought a $500 plane ticket and have 20,000 generic miles or points, “now your flight is $300,” Scharfstein says.

3. Enlist a rewards app

If you have a wallet full of cards with various (and sometimes rotating) bonus categories, reward apps can help you decide which one to pull out at the register.

Wallet is one example, and it will also suggest cards to apply for, based on your shopping habits. Reward Summit will also estimate the dollar value of extended warranties (a benefit buried in the fine print of many cards) and compare it to the cash back you’d get on other cards, “so you can make as much of an apples-to-apples comparison as you can,” Espey says.

In some cases, the extended warranty can be worth more than the miles or cash back, especially for large purchases.gift-card-display

“If you’re not spending a lot, the decision you’re making may not have a huge impact,” Espey says. “But if you’re buying a $3,000 MacBook Pro for someone, it can make a big difference.”

4. Involve gift cards in your strategy

Some cards give bonus cash back at grocery stores. Grocery stores sell gift cards. See the potential?

“If I’m shopping at Best Buy and it’s a big-ticket item, I’ll go to the grocery store, buy the gift card and then go use the gift card at Best Buy,” Scharfstein says. “But that’s probably only worth the time for big-ticket items.”

5. Watch for holiday promotions

Rotating-category cards (such as the Discover it and the Chase Freedom) offer holiday-friendly bonus categories in Q4. Past offerings have included “online shopping,” as well as specific department stores and online retailers.

But sometimes issuers throw in a few more holiday surprises, such as discounts on point redemptions, bonuses for transferring rewards and more.

“A lot of people just don’t look at those,” Espey says. “So I’d recommend going to your credit card company’s website and seeing what kinds of deals are going on right now.”

6. Think twice when redeeming for merchandise

If you have a pile of rewards points, you might not have to pay cash for gifts, as many cards allow you to redeem for electronics, cookware and many other items on your list.
However …

“You’re never going to maximize the value of your points that way,” Scharfstein says. “Those options exist to get consumers to trade in their points for less than they’re worth.”

If you have a lot of extra points to burn, or if you’re trying to save cash, redeeming points for gadgets might be the right move. But before you pull the trigger, look up the cash price of the item online to make sure you’re not getting an absolutely dismal value.

“Just make sure you’re not trading in $500 worth of points for a $200 item,” Scharfstein says.

Also note that redeeming for merchandise is not like shopping online. It can take weeks for items to arrive, meaning they might not arrive in time for his year’s holidays, even if you order soon. Check out the fine print on Barclaycard’s redemption portal:

redeeming for merchandise

7. Put together a killer card combo that rewards you all year

An analysis by Reward Summit found that those who changed their behavior with existing cards saved an average of $500 to $700 over the course of a year, Espey says. Those who made an effort to update their card portfolio with better cards saved upwards of $1,000 to $1,500.

So, it’s obviously important to think beyond the holidays and pick a lineup of cards that rewards you for the long term.

“You really shouldn’t just have one card if you really want to get the maximum benefits,” Espey says.

Espey recommends having the following in your wallet if you’re trying to maximize cash back:

  • A card that delivers elevated rewards on all purchases. The Citi Double Cash, for example, gives 1 percent back on all eligible purchases and another 1 percent when you pay your balance. The Fidelity Rewards card from American Express (a CreditCardForum advertising parter), meanwhile, gives 2 percent cash back on all purchases (although you’ll have to open a Fidelity account). Whichever you go with, make it a catch-all for purchases that don’t fit within other cards’ bonus categories.

    “You should have one card you know that you can use for most purchases that’s going to pay the highest percentage,” Espey says.

  • A card from a place you commonly shop. Frequenting Target for gifts, food and decor? The REDcard gives you 5 percent back on Target purchases. Online shopper? The Amazon.com Rewards card from Chase gives you 3 percent back on Amazon purchases.

    “It’s amazing how many people are spending thousands of dollars a year at Target, for example, and they aren’t getting 5 percent back,” Espey says.

  • A card with 5 percent rotating categories. As mentioned above, such cards tend to have holiday-friendly categories. But don’t rush out and get one of these cards just for the holidays if you won’t use the rest of the cash-back calendar, Scharfstein says. Rotating-category cards generally reward you 5 percent on $1,500 category purchases each quarter. So even if you max out the holiday categories, that’s $75.

    “The question is if it’s worth the inquiry to save a little extra on holiday shopping,” Scharfstein says, noting that another type of card (such a travel rewards card) with a bigger sign-up bonus might better justify a credit inquiry.

8. Pay your balance

Planning on carrying debt into the new year? Forget what you just read, and go for a low-interest card, or one that offers 0 percent on purchases for an intro period.

“If you’re not paying off your balance in full, don’t worry about the rewards,” Espey says. “Rewards matter so little if you’re paying interest.”

For more holiday rewards tips, check out our Google Hangout with CreditCardGuide.com.

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