How to maximize credit card rewards this holiday season

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The holidays are notoriously expensive. Americans expect to spend $1,530 this holiday season on gifts, travel, and entertainment.

From gifts to flights, there's one thing we know for sure: The end of the year can feel more stressful than joyful. But that doesn’t mean you’re doomed to be in debt this holiday season. There are plenty of ways to save money over the holidays — including using your credit card.

Using a rewards card for your holiday shopping and travel, you can earn cash back, points, or miles on your purchases. You can also redeem the rewards you’ve already earned for discounts, gift cards, or even free travel.

Here are the best ways to maximize your credit card rewards to save on holiday travel and shopping.

Using your credit card to earn rewards

It’s a good idea to find a card that rewards your spending, but you shouldn't stop there, says Andrea Woroch, consumer finance expert.

Some cards offer flat-rate rewards on all purchases, while others have categories that earn boosted rewards. Look for cards with higher rewards for holiday-related categories like shopping, dining, or travel. For example, you may use a card offering higher cash back rates at certain retailers.

Keep an eye out for cards that offer generous sign-up bonuses to help fund your holiday travel or pay for holiday shopping.

Using your credit card rewards on holiday travel

The holiday season is one of the most expensive times to travel — and inflation isn’t helping. One in three holiday travelers worry their trip will strain their budget, according to a recent Bankrate survey.

Luckily, your credit card rewards can help make your trip more affordable. If you haven't already, choose a credit card that offers travel rewards or airline miles. Make sure to use this card for your everyday purchases to accumulate points or miles over time.

If you already have (and use) a travel credit card, review your rewards and the options for redeeming them. If you’ve accumulated enough rewards, you can use them to offset the cost of your flight, rental car, or hotel stay.

Some cards let you book travel directly through their portal, while others may have you transfer rewards to a partner airline or hotel loyalty program.

You can also stack rewards with other discounts or promotions. For example, you could use your card to book a discounted flight and then apply an airline's promotional code for added savings.

Best credit cards for holiday travel

Here are a few popular travel credit cards offering solid rewards that can help you lower the cost of your holiday trip;

• Chase Sapphire Preferred® Card: This card is well-regarded for its flexible redemption options. Earn 5X points on travel booked through Chase Ultimate Rewards and on Lyft rides (through March 2025). Earn 3X points on dining (including eligible delivery), select streaming, and online grocery purchases (excluding wholesale clubs). Earn 2X points on all other travel and 1X on all other purchases. It also offers a generous sign-up bonus.
• Capital One Venture Rewards Credit Card: With this card, you earn 5X miles on hotels and rental cars booked through Capital One Travel and 2X miles on all other purchases. It has a straightforward redemption process, allowing you to use your miles to offset travel expenses. It also offers a sign-up bonus and doesn't charge foreign transaction fees.
• The Platinum Card® from American Express: This premium card offers a range of travel benefits, including airport lounge access, airline fee credits, and hotel status upgrades. It also provides 5X points on flights booked directly with airlines or through Amex Travel (up to $500,000 per calendar year). You’ll also earn 5X points on prepaid hotels booked through the travel portal. Keep in mind this card does have a higher annual fee.
• Citi Premier® Card: With this card, you earn 3X points on travel, gas stations, airfare, supermarkets, and hotels. It also offers 1X points on all other purchases. Points can be transferred to various airline loyalty programs, providing flexibility.
• Bank of America® Travel Rewards credit card: This card offers 1.5X points on all purchases, which you can redeem for statement credits against travel expenses. It has no annual fee, making it a good option for those who want simplicity.

Using your credit card rewards on holiday shopping

You can also redeem your credit card rewards to lower your holiday shopping bill, says Woroch.

Some cards offer bonus rewards on retail purchases, online shopping, or specific categories like electronics or clothing. Other cards have rotating bonus categories that offer higher rewards during specific periods.

Check if any of your holiday shopping falls into these categories. For example, if your card offers rewards for online shopping, use it while browsing online.

Many rewards programs like American Express Membership Rewards and Chase Ultimate Rewards make it easy to redeem rewards for gift cards or merchandise. You can tailor this to your holiday shopping list.

Before swiping your card, compare prices across different retailers to get the best deal. Some cards offer price protection, so if you find a lower price for the same item within a certain amount of time, you can request a refund for the price difference.

Some card issuers have online shopping portals that offer additional rewards for purchases made through their platform. Using these portals, you can earn extra points or cash back on top of the rewards you already earn.

There are also third-party shopping portals that can help you earn more, says Woroch. Browser extensions like PriceBlink provide an instant price comparison, and websites like Sidekick find and test coupon codes you can stack with other promotions.

Best credit cards for holiday shopping

The best credit cards for shopping during the holidays depend on where you shop and the rewards you want to earn. Consider these options:

• Prime Visa Card: This rewards credit card comes with no annual fee when you have an Amazon Prime membership. You can earn 5% back at Amazon.com and Whole Foods, 5% back on Chase Travel purchases, 2% back at gas stations, restaurants, and transit, and 1% back on all other spending. You can even instantly qualify for a $100 Amazon gift card upon account approval.
• Citi® Double Cash Card: With this card, you earn 2% cash back on every purchase – 1% when you make the purchase and another 1% when you pay your bill. There are no category restrictions, making it a versatile option for holiday shopping.
• Wells Fargo Active Cash® Card: You’ll earn 2% unlimited cash rewards on purchases, period. This simple rewards structure ensures you’ll earn rewards on your holiday purchases, no matter where you shop.
• Chase Freedom Unlimited®: This card offers 1.5% cash back on all purchases. You’ll also earn 5% back on Lyft purchases (through March 2025), 5% back on travel booked through Chase Ultimate Rewards, and 3% back on drugstore purchases and dining. It also has a generous sign-up bonus and an introductory 0% APR period, which can be helpful if you plan to make large purchases and pay them off over time.
• Blue Cash Preferred® Card from American Express: With this card, you earn 6% cash back at U.S. supermarkets on up to $6,000 per year in purchases (then 1%), 6% cash back on select U.S. streaming services, 3% cash back at U.S. gas stations and transit, and 1% cash back on other purchases. It does have an annual fee, so make sure the rewards outweigh the cost.
• Target REDcard: If you do a lot of shopping at Target, this store card offers a 5% discount on all purchases at Target and Target.com. It also includes benefits like free shipping, extended returns, and exclusive offers.

How to maximize your credit card rewards all year round

To get the most out of your credit card rewards, make sure you're using your card responsibly.

Set a realistic spending plan and try to pay your credit card in full each month, says Adrianna Adams, head of financial planning at Domain Money. Credit cards often come with high interest rates and can wipe out any rewards you earn if you're not careful.

"Also, if you carry a balance on your card, it can have a negative impact on your credit score," says Adams.

If you’re worried about carrying a balance, look into 0% APR credit cards that won’t charge interest for an initial promotional period. Just make sure you have a plan to pay off your balance before the period ends.

The bottom line

The holiday season can cost a pretty penny, but you can make the most of your spending with your credit card. Not only can you maximize rewards when you spend money with a credit card, but you can strategically redeem points to keep costs down.

No matter what you do, make sure you plan to pay off your purchases before interest accrues. If you carry a balance on a card with a regular variable APR, everything you buy will cost way more than it should.

Editorial disclaimer: Opinions expressed are author's alone, not those of any bank, credit card issuer, or other entity. This content has not been reviewed, approved, or otherwise endorsed by any of the entities included in the post.