1. Earn the Credit Card Welcome Bonus
When applying for a new credit card, you can actually earn rewards if you use the card responsibly. The key is to choose a card that offers a good welcome bonus, and then use the card responsibly for planned purchases and bills during the holiday season.
2. Take Advantage of the Annual Percentage Rate Offer for Big Holiday Purchases
If you have a long list of holiday purchases you’d like to make but think you may not be able to pay them off right away, consider applying for a credit card that offers a 0% introductory annual percentage rate on purchases. With the right offer, you can earn rewards on last-minute gifts and have time to pay off your new balance without paying interest.
3. Use Cards Strategically to Earn More Rewards on Holiday Shopping
Do you have more than one rewards credit card? Make sure to use the right credit card to save money and maximize rewards on your purchases. For example, you might use one card that allows you to earn extra rewards at grocery stores for buying treats and gift cards, and use another card that gives you more rewards on purchases at specific retailers.
4. Use Cash Back Offers from Credit Cards
Take advantage of savings on your recent purchases by utilizing cash back offers available from your credit card’s cash back programs. These offers can vary significantly and may change over time, but they allow you to earn extra cash or points on qualifying purchases made with your card. To take advantage of these offers, add them to your account online or through your card’s mobile app, and then complete the required spending according to the terms and conditions set by the card issuer.
5. Redeem Rewards for Last-Minute Gifts
Do you have leftover rewards that you don’t plan to use? Instead of spending your holiday budget, you may be able to redeem rewards for gift cards that you can use to cover holiday expenses or give as last-minute gifts. Most credit cards that offer cash back and rewards allow you the option to redeem rewards for gift cards, including American Express, Chase, Capital One, and Wells Fargo. You can even redeem your airline miles or hotel points for gift cards. For example, you could redeem 49,000 points from the IHG One Rewards program for a $100 gift card to Lowe’s or Kohl’s.
6. Create a Plan Now to Pay Off Holiday Credit Card Debt
Whether you have lingering debt from last year’s holiday season or are expecting new credit card bills from this year’s shopping season, create a plan now to pay off those balances. It’s very easy to fall into the trap of only paying the minimum and racking up interest month after month – especially when you’re repaying debt at the average current credit card interest rate of 20.72%. To eliminate debt, create a repayment plan that fits your budget. If you can, start the plan this month rather than waiting for credit card statements to arrive in 2024. If you need help determining what to pay or how much your credit card debt is costing you, our credit card repayment calculator can help.
7. Consider a Balance Transfer Card
Lastly, don’t blame yourself if you have credit card debt that doesn’t seem to go away. If you’re making payments but the interest on your credit card is increasing your debt each month, consider applying for a balance transfer credit card. Some cards offer a 0% introductory annual percentage rate on transferred credit card balances for up to 21 months. However, remember that there may be balance transfer fees with the best balance transfer cards, which can add 3% to 5% of the amount of debt being transferred upfront. Also, remember that balance transfer cards will only work for you if you have a repayment plan in place, and you are able to stick to it and stop using credit cards for purchases. This last point is important as you can’t really get rid of debt if you keep adding to the balance.
Conclusion
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The holiday spending season is expected to be one of the biggest ever, but that doesn’t mean you should get carried away with credit card debt. Use your credit card rewards strategically, create a plan to pay off balances, and take advantage of ways your credit card can be a valuable financial tool. By using your credit card responsibly, this holiday season can be special for reasons other than the debt you incurred.
Source: https://www.cnet.com/personal-finance/credit-cards/advice/best-credit-card-tips-for-the-holidays/
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