How to Use Credit Card Points to Save on Gift Giving this Holiday Season

The holiday gift giving season is almost here. In fact, due to the COVID-19 pandemic, many experts are predicting an early start to the season as consumers try to avoid crowds and prepare for shipping delays.

One way to offset the expense of holiday shopping is to use credit card points to buy gifts or earn rewards that you can use later. If you’re wondering how to use credit card points to save on gift giving this holiday season, you’ve come to the right place. Here are some tips to help you make the most of your credit card points and give thoughtful gifts to the people you love.

Consider Getting a Rewards Card Now

Let’s start with the obvious. If you don’t already have a rewards card, then now is a good time to consider getting one. There’s a good chance that for a lot of people, the holiday shopping season will start early this year. Retailers are extending their usual Black Friday deals throughout November.

Getting a rewards card before you start your holiday shopping may make sense. A lot of rewards cards offer an initial points bonus in the first few months. Depending on how much you intend to spend this holiday season, you may spend enough to qualify for the points bonus. While your spending now may not help you to save on this year’s presents, you will be accumulating points that can help you with your expenses in 2021.

Trade in Some of Your Miles for Points

In a normal year, we probably wouldn’t recommend trading in your airline miles for points. But, 2020 has not been a normal year. Most people aren’t traveling and we don’t know yet when the COVID-19 pandemic will end and we’ll be in a position to resume normal travel.

You may have miles that you’ve earned that are due to expire or that you can’t use. If that’s the case, we suggest reviewing the terms and conditions of your rewards card to find out how much those miles are worth. You may be able to trade some of them in to get gift cards to give as presents this year – or to use for other purchases.

Turn Your Points into Gift Cards

One of the easiest ways to turn your points into gifts this holiday season is to trade them in for gift cards. As of 2019, 59% of all people surveyed by the National Research Federation said that gift cards were on their holiday wish lists.

Most points cards allow cardholders to redeem points for gift cards. If you choose to go this route, make sure that you read the fine print. There may be a minimum card amount. For example, many cards require a minimum gift card amount of $25.

Keep in mind, too, that if you want to buy merchandise you can redeem your points to buy gift cards that you use for your holiday shopping. This can be a great way to save money on your holiday shopping.

Use Your Credit Card Portal to Find Deals

Once you have a credit card that gives you points for purchases, it’s important to make the most of it. One way to do that is to visit your card issuer’s online portal to look for deals that you can take advantage of this holiday season.

For example, some cards offer bonus points if you shop with select retailers. If you have a card that offers you a bonus for shopping with Bloomingdale’s, you might want to shop there for at least some of the people on your gift list.

You may also find special offers where you can get extra points for all your holiday shopping or even for things such as groceries or restaurant gift cards. While in-person gatherings are likely to be curtailed this year due to the pandemic, you can still send food gifts or make cookies and other goodies to share with your family and friends.

Stack Online Deals and Coupons for Additional Savings

What if there’s a retailer you love that doesn’t have a partnership with your credit card carrier? The good news is that you can still save by being smart about finding online deals and coupons.

One app we recommend is Honey, which automatically searches for promo codes when you check out online and will scour the web for coupons and savings. Before you use it, read the fine print of your credit card agreement. Some credit cards have limitations that invalidate bonus points if you use an outside coupon code.

Of course, even if you can’t stack deals, you can still earn points on your online purchases. We recommend crunching the numbers to determine the most advantageous use of your points card this holiday season.

Take Advantage of Free Shipping

We anticipate that a lot of our Addition Financial members will be shopping exclusively online in 2020. That being the case, we all need to be understanding about shipping expenses and potential delays.

Getting your shopping done early is a good way to save money on last-minute shipping charges. You may also want to check to see if your credit card carrier offers free shipping on any purchases. Those shipping charges can add up quickly and saving on them is a good way to make the most of your points card.

Add Family Members to Your Card

Do you have a spouse or children? If the answer is yes, you may want to consider adding them to your card to maximize your points during the holiday season. As the cardholder, you can accrue points whenever additional cardholders use their credit cards.

Every time you or your family member makes a purchase with your card, you can earn points. The points you earn can be used for additional gifts or to put toward a large savings goal, such as a family vacation.

Shop Before Thanksgiving

As we have already mentioned, a lot of retailers are anticipating higher-than-usual online sales and preparing to process and ship orders. For that reason, many are offering deals throughout November that they would normally reserve for Black Friday.

If you have some big ticket items to order for the holidays, your best bet is to order them now and get the points. Then, if you have smaller gifts – or last minute gifts for coworkers or casual acquaintances – you can use the points you accrue with early shopping to buy gift cards later in the season.

Use the Right Card

Some of our Addition Financial members have more than one rewards card. If you do, too, then a big part of maximizing your points this holiday season is tracking your spending on each card. That’s because you may be maxing out on benefits on one card.

For example, some card issuers cap the number of points you can earn in a given category, such as gas or groceries. If you’ve maxed out your points for the year, then you can benefit from using a different rewards card for those categories to get as many points as possible.

Take Advantage of Bonus Categories

Most reward cards have bonus categories where you can earn additional rewards. One thing to be aware of is that the titles of bonus categories can be misleading. Let’s look at an example.

When you see “Travel” as a category, what do you imagine? If you’re like many people, you’re thinking airfare. However, reading the fine print might reveal that you’ll get bonus rewards for all travel, including:

  • Trains and bus travels
  • Taxis and Ubers
  • Ferries
  • Parking lots

Likewise, you might think of concerts and theater events when you think of the Entertainment category, but you could be missing out on bonus points for going to museums and zoos, as well. By making sure that you understand every possible type of spending that’s covered under each category, you’ll know when to use each credit card to maximize your rewards.

Label Your Cards

If you do have more than one points card, it can be difficult to remember which card to use in which situation. Instead of trying to carry that information in your head, we suggest something so simple that you might overlook it: labeling your cards.

By attaching a small piece of tape to your card or card holder, you can keep track of each card’s points and bonus categories to ensure you never reach for the wrong card again. Of course, you can also use an app to keep track, but wouldn’t it be nice to have everything right there when you reach for your wallet?

While 2020 has had its challenges for all of us, this may be the perfect holiday season to maximize your credit card points. Retailers are encouraging shoppers to buy early and incentivizing them to do so – and with some planning and preparation, you can reap the rewards!

Are you in the market for a new points card? The Additional Financial Premier Cash card offers 3 points for travel, 2 points for gas & groceries, and 1 point for everything else – plus 5 points for special quarterly spending. Click here to apply now!

The content provided here is not legal, tax, accounting, financial or investment advice. Please consult with legal, tax, accounting, financial or investment professionals based on your specific needs or questions you may have. We do not make any guarantees as to accuracy or completeness of this information, do not support any third-party companies, products, or services described here, and take no liability or legal obligations for your use of this information.