Thursday, 21 December 2023

This Trick Could Help You Maximize Credit Card Rewards When Buying Holiday Gifts

by Rose White

This Trick Could Help You Maximize Credit Card Rewards When Buying Holiday Gifts

Image source: Getty Images

If you’re still shopping for your holiday gifts, chances are good you’re down to the last few people on your list who may be hard to buy for.

The good news is, you may be able to get great presents for these people while also maximizing your credit card rewards. Here’s how you can do it.

Try this trick to get the most credit card rewards possible this holiday season

One great way to get some extra credit card miles, points, or cash back while doing your holiday shopping is to purchase presents at places where you get bonus card rewards — and charge those purchases.

For example, let’s say your credit card offers you 5% back at restaurants. When you’re shopping for people on your holiday list and aren’t sure exactly what to get for them, why not purchase a gift card for a great local restaurant?

You’ll be able to get your bonus 5% back that you wouldn’t get if you purchased the item elsewhere, and your friends can get a great local meal out of it at a place they might otherwise not try. It’s a win-win. This can make a big difference in your rewards balance, too. Let’s say you spend $100 on gifts. If you do it at a place where you get 5% back, that’s $5 for you instead of just $1 in rewards if you bought at a place that didn’t give you a bonus and you earned only 1% instead.

Likewise, gas or grocery gift cards could be a good option if your card happens to offer bonus rewards on these types of purchases. Just check what categories your credit card offers you extra rewards for and focus on getting holiday gifts at those types of locations for anyone you don’t have a specific present in mind for.

Be sure to check your card’s fine print first

While this technique can work really well for most people, you’ll want to check the fine print on your credit cards. Some cards exclude the purchase of gift cards or cash equivalents from bonus rewards. If your credit card is one of them, it should specify this in your cardmember agreement. So you may want to opt to use a different rewards card if you’re hoping to maximize the bonuses you earn with a little strategic holiday shopping.

Often, when cards exclude gift cards, the exclusion doesn’t necessarily apply all that broadly. For example, it may raise a red flag and result in not earning rewards if you buy Visa gift cards — but if you’re charging gift cards at a local restaurant and this just shows up on your card statement as a purchase at that restaurant, the card issuer is going to have no reason to questions that particular purchase. So you’ll most likely get your bonus rewards (at least that’s the way it has worked for me several times in the past).

You’ll also want to be sure you’re able to pay off the purchases you’ve charged on your card in full out of your checking account when the statement comes. If you have to pay interest on the gift cards you’ve bought, this gift idea is very likely to cost more than you’ll earn back from any of the bonus rewards, so this technique could backfire.

As long as your card allows it, though, and you have the funds to pay for the gifts you buy, there’s nothing wrong with letting your card rewards program help guide you when you make your present-purchasing decisions this holiday season.

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The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Christy Bieber has positions in Visa. The Motley Fool has positions in and recommends Visa. The Motley Fool has a disclosure policy.