In a snowy holiday scene, a father and daughter carry packages together, looking at each other and smiling.
Shoppers will do billions of dollars in holiday shopping using their rewards credit cards this season.
In a snowy holiday scene, a father and daughter carry packages together, looking at each other and smiling.
Shoppers will do billions of dollars in holiday shopping using their rewards credit cards this season.
Financial Health
December 20, 2019

Consumers hold the cards to rewarding holidays

Using rewards credit cards smartly can help you save during the holidays, as long as you budget and pay off your balance in full each month.

Mary J. Gray, a retired art teacher from Winter Park, Florida, signed up for her first rewards credit card just six months ago, and she has already earned rewards points — just in time for the holidays.

“I use it for everything now — travel, groceries, eating out,” said the artist. “It’s worked out great.”

Gray has joined millions of card users who have fueled the dramatic industrywide growth of rewards cards in recent years. Her experience with the Wells Fargo Propel® Card underscores the growing consumer appetite for rewards cards in general.

People now use rewards cards for more than 80% of their credit card purchases, according to The holidays are prime time for consumers to tap into their credit card rewards — such as points, miles, cash back, and other incentives, the industry news site reported.

“Rewards are used throughout the year, but there is a massive spike during the holidays,” said Dani Cushion, chief marketing officer for Cardlytics Inc., which runs loyalty programs for banks. “Everyone wants to save money, and using them to pay for things at this time of the year just makes sense. It’s money not coming out of your pocket.”

By all indications, this holiday shopping season is likely to be another banner year for rewards cards. Holiday retail sales are forecast to reach up to $730.7 billion in 2019, a year-over-year increase of between 3.8% and 4.2%, the National Retailers Federation reports. At that rate, rewards card holiday spending could approach $600 billion, based on research.

Some analysts expect an even bigger increase from 2018, when sales weakened amid a stock market downturn: “We expect holiday retail sales to increase 5% this year, with e-commerce taking the top spot among categories and now comprising more than a fifth of all holiday sales,” Wells Fargo Securities reported in its Holiday Sales Outlook .

With the rapid growth of holiday e-commerce sales, it is wise for consumers to look closely for rewards cards that offer the best incentive deals for online spending, said Meredith Pettinelli, a senior analyst for Corporate Insight, publisher of Credit Card Monitor and Bank Monitor.

“The rewards cards users we survey are certainly focused on using the right card at the right time,” she said. “Before ordering something online, they’ll be sure to choose a card with categories that reward them for online shopping, and they’ll be using those rewards to their advantage.”

Text: 178 million: U.S. adults with a rewards card. $1,048: Average holiday spending per consumer. 80%: Purchases with rewards cards. $730 million: Holiday spending forecast. $584 billion: Rewards holiday spending.
Source:, U.S. Census Bureau, National Retail Federation, and Consumer Financial Protection Bureau.

Pettinelli said Wells Fargo’s Propel Card is among the leaders in online incentives, with bonus rewards points for spending on things like popular streaming services — along with general spending on dining, gas, and a wide range of other purchases. ( called it the best no-annual-fee card in October 2019.)

“Wells Fargo is unique with the breadth of earnings categories it provides in the Propel Card,” Pettinelli said. “It also stands out for its flexible and innovative redemption options. Our UX (usability) testing found that users are pleasantly surprised, for example, when they see the option that allows them to donate to a charity. They feel it really puts the brand in a positive light.”

With the holiday retail season in full swing, it’s a good time for consumers to do some comparison shopping to find the best rewards cards available for them in the market, said Heather Philp, head of credit card products for Wells Fargo Cards, Retail, and Merchant Services.

In addition to the Propel Card, for example, Wells Fargo’s Cash Wise Visa® card pays 1.5% cash back on every purchase, she said. And according to the TSYS U.S. Consumer Payment Study of 2018 (PDF, 9.22 MB), 80% of rewards cards users redeem their rewards for cash back — the most popular option. For the Propel and Cash Wise cards, points do not expire as long as the account is open, so consumers can keep their points and use them when they choose, beyond the holiday season.

“When it comes to holiday shopping, there are many opportunities to maximize credit card rewards earnings,” Philp said. “We know that consumers today are looking for a card that offers simple and inclusive value. It’s a good idea for them to consider how and where they spend money, and then choose the card that is the right fit for their lifestyle.”

Finding a card that fits your lifestyle is important so you’re able to earn rewards on things you’re already doing in your everyday lives, while also spending within your means, she added.

For rewards cards newcomers like Gray, finding a great introductory offer can play a big role in the card they choose. For her, it meant a $300 bonus for spending $3,000 in the first three months using the Propel Card. Now, buoyed by the card’s bonus travel points, she’s eyeing a possible trip to Hawaii to visit family next year.

“The bonus points definitely make that trip more appealing now,” she said. “Hawaii is looking better and better to me.”