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Your credit card bills may not inspire visions of holiday cheer — but the good news is, your credit card spending has likely earned you at least a small trove of points, miles, or cash back. According to the Consumer Financial Protection Bureau’s latest Consumer Credit Card Market report (PDF), more than 80 percent of all credit card spending in 2018 was done on a rewards card.
Instead of blowing your budget to pay for gifts and other holiday-related expenses, consider digging into your credit card accounts to see what rewards you may have to help fund gift-giving season.
Unless you’re a points aficionado who anticipates the close of every billing cycle like it’s Christmas morning, you might not even know how many points you’ve amassed. In fact, J.D. Power’s 2018 U.S. Credit Card Satisfaction Study showed that 36 percent of people with credit cards don’t fully understand their rewards programs.
And you likely have more rewards available to you this year than ever before. As credit card issuers vie for your loyalty, they sweeten their rewards with big intro offers, higher cash back rates, and other perks. In 2015, issuers spent an average of $139 per rewards card on expenses such as cash back and lounge access. That rose to $167 per rewards card in 2018, according to the C.F.P.B. report.
Check to see if you’ve accumulated cash back
If you have a cash back credit card but haven’t set up automatic redemptions, you may have amassed a small stockpile of cash back rewards. Beverly Harzog, a credit card expert and consumer finance analyst for U.S. News & World Report, doesn’t claim her cash back throughout the year — instead, she prefers to claim all of her rewards in December, when her expenses could otherwise exceed her usual monthly budget.
“Most years, I have enough money in cash back from credit card rewards to pay for Christmas gifts,” Ms. Harzog said.
Most credit card issuers give you a variety of options, like statement credits or checks, to claim your cash back. Capital One lets you apply your cash back toward specific purchases too, which might make it psychologically easier to pay off any expenses that exceed your budget. If you’re in the market for a new cash back card, or want to see how yours stacks up, here are Wirecutter’s recommendations for the best cash back credit cards.
Take advantage of holiday bonuses
Although we generally don’t love the complexities of rotating-category cards — meaning you get bonus points on different spending categories like groceries or gas each quarter — they can be more valuable during the holidays.
For example, from now through December, the Chase Freedom offers 5 percent back on both the spending you do at department stores and the purchases you make via PayPal or Chase Pay (on up to $1,500 in combined purchases, then 1 percent). Millions of online stores, from big merchants like Best Buy to small Etsy shops, accept PayPal. If you max out that bonus category, you put $75 back in your pocket — and when you pair the Freedom with the Chase Sapphire Reserve, you could earn as much as 7.5 percent back. We explain how in our review of the Chase Freedom card.
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Transfer your loyalty points to hotel and airline programs
Some travel credit cards, like the Platinum Card from American Express or the Chase Sapphire Reserve, let you transfer your points to hotel or airline loyalty programs. Although some loyalty programs, like Hilton’s, are priced dynamically — which means that traveling at peak times, like Christmas, generally requires more points than off-season traveling — not all are. For example, rewards nights at Hyatt hotels require the same number of points every day of the year, whether you stay in Times Square on New Year’s Eve (yikes) or book a room closer to home on a random Wednesday in August. For more, read our guide to the best travel rewards credit cards.
If you want to maximize the value of your points and miles, consider booking your holiday travel with a loyalty program that doesn’t price dynamically, such as HawaiianMiles (the frequent flyer program for Hawaiian Airlines) or Cathay Pacific’s Marco Polo Club.
Invest in money-can’t-buy-experiences
Some card issuers let you redeem your points for V.I.P. experiences, many of which can only be booked with rewards. Although typically pricey, these experiences can also be memorable and unique gifts.
The Chase Experiences portal, which is available only to people with certain cards (like the Chase Sapphire Reserve), currently offers access to the 2020 Sundance Film Festival with a V.I.P. package that includes reserved seating at screenings and tickets to private cast parties. Priced at 690,000 points (worth $6,900), this could be a dream gift for the movie buff in your life. Foodie fanatics might appreciate the 55,000-point private kitchen tour and five-course dinner at New York City’s Per Se restaurant (worth $550).
Skip shopping portals
More often than not, redeeming your rewards for merchandise via a card issuer’s online shopping portal isn’t a good idea.
You can find better deals elsewhere: As of this writing, an Instant Pot Duo 6-Quart, which costs $79 on Amazon, is available for 15,990 points on the American Express shopping portal. But those points are worth $159 when you redeem them for airfare in the Amex travel portal. Similarly, Citi Double Cash cardholders can score a $25 L.L. Bean gift card for 3,500 points, which are worth $35 when you redeem them for cash back. Take your money elsewhere.
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A version of this article appears at Wirecutter.com.
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