Best Credit Cards for Your Holiday Shopping
NEW YORK ( MainStreet) It's time to talk about holiday helpers, and I don't mean the elves. I'm talking about trimming your spending, even as you trim that tree.
With Thanksgiving fast approaching, the flag is officially about to drop on holiday season. Pay no attention to the Santa already in front of the curtain. The holiday spending season officially begins once we've carved up our turkeys and regular season college football ends.
It's not cheap either. According to one survey, Americans plan to spend over $1,000 per household on the holidays this year . Almost a fifth of us might spend as much as $5,000, with hundreds more at restaurants. That's obviously a lot of money, so in between making your list and checking it twice, it's probably worth figuring out how to recapture some of that value.
Erik Larson, founder of the consumer reporting site NextAdvisor.com, recommends that consumers take advantage of credit card reward programs. A good idea under any circumstances, the points, cash back and miles can add up especially quickly when paired up with holiday spending. Of course, knowing that this is a good idea is the easy part. Figuring out which cards and how to use them takes a little more planning.
"You want to work backwards in a couple of ways," Larson said. "Know one, what you're going to spend the money on and two, what you're going to use the rewards for. So if you know you're going to take a vacation this year and you're going to use the rewards for travel, something like the Barclay Arrival card might make sense. But if you're not going to travel and you know you just want cash back, something like the American Express Blue is going to be great."
Planning does make perfect, and tailoring your credit card to your spending habits can help you take the most advantage of it. For example, Larson said, there's no use letting frequent flier miles build up for someone who never flies. Far better to get rewards points on a product you'll actually use, or maybe even straight cash back.
Larson also urges consumers to choose a card that matches their spending habits. As we've all seen with the various "3-2-1" commercials, credit cards offer various rewards for different purchases. An online shopper, for example, could get a lot more value out of Discover from its e-commerce rewards points than someone wandering the aisles of the Bass Pro Shop.
"You want to think about where you're going to be spending," Larson said. "For a lot of people these are their biggest spending months, November through December. You want to think about where you're going to be spending and if you do that you can probably find a card that's going to give you as much as three to five percent cash back."