How to Maximize Holiday Rewards While and Minimizing Debt

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Last updated on May 2nd, 2023

The holiday season is fast approaching, and with that comes big seasonal spending. Beyond the gifts, Americans spend heavily on travel, food, entertainment, and more during November and December. Here are some helpful tips on maximizing your holiday rewards on credit cards – and minimizing debt.

Tips for Saving Money This Holiday Season

Here are our top tips for saving money this holiday season:

Avoid Store Cards

The temptation to apply for a store credit card is ever-present. When checking out at most stores, cashiers ask if you’d like additional savings via the store’s in-house credit card. In most cases, however, you should avoid store cards.

Why? Store cards offer very little value for consumers unless they spend very heavily at a particular retailer. Store cards are typically closed-loop credit cards. With a closed-loop card you can only shop at one retailer, and it lacks a significant payment network – like Visa or Mastercard.

Other negative aspects of store cards include:

  • Not all cards report to the three major credit bureaus regularly
  • Higher APRs than open-loop credit cards
  • Limited signup bonuses / holiday rewards

Find the Right Card for Each Purchase

Instead of using one credit card, maximize your rewards by selecting the right card for every purchase. A card like the Discover It Cash Back, for instance, offers 5% back at the online sites of Walmart, Target, and Amazon during the holiday season. Using your Discover Card for gift purchases, online groceries, or other essentials is a great idea.

If you aren’t sure what the right card might be, consider a versatile cash back card, like the Chase Freedom Flex. It earns 5% back in rotating categories, and Q4 2020 includes PayPal and Walmart. Since PayPal is a great tool for online and in-store payments, it’s an easy way to earn extra rewards.

Take Advantage of Signup Bonuses to Maximize Holiday Rewards

Most rewards credit cards come with signup bonuses – some of which are very lucrative. Use these bonuses to your advantage.

If a card offers a lengthy 0% intro APR on purchases, for instance, consider using that card to finance larger purchases during the holiday season. Then you will have 12, 15, or even 18 months or more to pay down those balances without worrying about interest charges.

Some cash back cards offer a bonus for spending a set amount within a given period. Using Freedom Flex as an example, new accounts receive $200 cash back for spending $500 on purchases within the first three months. Spend $500 on gifts, groceries, bills – whatever – and instantly recoup $200 of that spend.

Related Article: The Best Online Shopping Credit Cards of 2020

Featured photo by Nicole De Khors / Burst

About: Cory
Cory Santos

Cory is's "Jack of all trades" and resident credit expert, covering all facets of the credit card space. Cory holds academic degrees in both the U.S. and U.K. In addition to credit cards, Cory finds that jogging, cats, and memes are essential parts of a balanced day.

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