Using Credit Card Cashback Rewards for Holiday Spending
When I was younger, I used to have so much anxiety about holiday spending. Back then I was living paycheck to paycheck and didn’t have much savings. When the holidays came, I would overspend on Christmas presents for my friends and family and end up stressed that I didn’t have enough for the monthly necessities. That was a long time ago, but it makes sense to have a plan when it comes to holiday spending. Last month, MainStreet’s Vida Jatulis, CFP® shared her post about Joyful Holiday Spending.
Over the years, MainStreet has shared many ideas to come up with holiday spending money:
- Review your spending to eliminate spending categories that no longer serve you
- Earn extra income – put your skills to use
- Sell your stuff – put the extra things you no longer use up for sale
- Rent your stuff
This month, I’d like to share how I currently save for holiday spending – Using Credit Card Rewards!
There are many ways to use credit cards to get rewards. Some credit cards give travel points that you can cash in for future travel. Others provide cash-back Amazon dollars that you can spend on Amazon. My favorite reward by far is cashback. I add these cashback dollars to my holiday spending fund to make the holidays more enjoyable and affordable. Here is an example of how I set up my credit card cashback spending.
I carry 2-3 credit cards in my wallet for convenience and to manage cash flow. I don’t like carrying cash; this way, I can track my expenses through my Tiller cash flow tracking program. I put most of my spending on my credit cards and pay them off in full at the end of every month.
I visit the Chase Freedom card website each quarter to see what the 5% categories are and plan my spending for the upcoming quarter. For gas stations, restaurants, travel, and Costco purchases I only use the Citi Costco Visa. Everything else goes on the Star One Rewards Visa, including major purchases, emergencies, etc. Based on my spending in the past 12 months, I am expecting my cashback to be about $350. Not a bad way to earn extra dollars on what I am already spending.
You can visit Bankrate.com to review current rewards card offers, the types of cards out there, and how to choose the right card for you. I prefer cards that have no annual fee.
Be sure to be smart about credit card usage. Payoff your balance each month and pay it on time. Also, monitor your monthly statements to be sure the charges are all yours.
For more smart tips on using credit cards check out:
- Anna’s Best Practices for Credit cards article
- A podcast about Credit Basics
- Money Date on Credit Reports Tips and Tricks
- Cynthia’s money tip on Organizing credit card files
