Tricks for getting the most from your credit cards when holiday shopping

By Features Consumer Reports

While you may be focused on figuring out what you’ll be for Halloween, the frightening truth is that the holiday shopping season is here. So now’s the time to make sure you’ll be getting the most out of your credit card when you finally make your way into the stores—physically or virtually. Here’s what to do.

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Get the right card. Make sure you have a card that provides the most when it comes to rewards and other benefits. Review what’s out there on credit card selection sites, such as Bankrate.com, CreditCards.com, LowCards.com, and/or CardHub. Keep in mind that some of these sites prominently feature cards for which they’ve received compensation, making it tougher to find the best cards in various categories. So review the card lineup carefully. Also, find out what we have recommended.

We generally like cards that provide cash rebates better than those that provide awards points redeemable on products and services, the cost of which may be inflated. But do your research, and pick the card that’s best for your circumstances. Apply now, so you’ll have the card well before the holidays.

Along with rewards, consider extra benefits. Many cards, for example, automatically extend the warranty on most products you buy with them for up to a year or so. Other useful perks include price protection, which reimburses you if you find a lower price for something you bought during the last 30 days or so; and purchase loss protection, which pays you back if an item you bought with card is stolen or damaged.

Another good one is rental car insurance, which covers you if that car you rented got damaged while you were driving it over the river and through the woods to the shopping mall. Be sure to check the fine print on these benefits to find out their limitations and requirements.

Consider a store card. Another option may to be to apply for retailer credit cards for the stores you shop at frequently. Those may provide more benefits than you can get with general credit cards. For instance, the Target credit card provides an immediate 5 percent back on purchases at Target. And Target card customers get free shipping at Target.com and 30 days added to the retailer's return policy. But applying for additional credit cards can cause a temporary dip in your credit score. And more cards mean more billing statements to keep track of.

Check out our holiday gift ideas and guide.

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Sign up for extra rewards. Many cards offer rebates (or higher rebates) on rotating categories of merchants that change every quarter. For instance, from July through September, the Chase Freedom card paid a 5 percent rebate on purchases from stations and Kohl’s department store. But beginning this month, the rebate switches to purchases from Amazon.com, Zappos.com, and select department stores. But for many cards, these extra benefits don't come automatically. You must sign up by the deadline, which, for the Chase card, is Dec. 14.  

So find out whether the extra perks come automatically or whether you have jump through hoops like Fido at a circus. Given that the new quarter starts this month, now is the time to figure this out. One way not to forget which merchant categories currently are eligible for those rebates is to write them on a small piece of paper and tape it to your card.

Find out about bonus cash. Some card issuers give you extra rebates if you use your card at certain partner retailers. For instance, Citibank’s Bonus Cash Center, provides up to 10 percent cash back (5 percent on average) on purchases at Walmart, Sears, and hundreds of other retailers. And unlike with the bank’s standard rebate program, there’s no limit on the rebates you can earn. But you must buy through the issuer’s website.

So find out if your card issuer has such a program. And so you don’t forget, tape another little reminder to your card.

Get rid of that balance. If you’re carrying a balance on your card, remember that you’ll typically lose the interest-free grace period on any new purchases. So use a balance-free card for your gift purchases. If you don’t have one, there still may be time to pay off what you owe. Another trick is to get a second card for new purchases and throw the one with the balance in a drawer until you pay it off. But don’t charge more than you can afford to pay back by the due date. Your friends and family don’t want you going into debt buying them that combo waffle maker/curling iron/iPod dock they never wanted to start with. Really.

—Anthony Giorgianni

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