A man and woman appear to be out shopping for the holidays. They are dressed in heavy coats and scarves. She is also wearing a red stocking cap. He is holding a smartphone; both are smiling at it. She holds a credit card.
A man and woman appear to be out shopping for the holidays. They are dressed in heavy coats and scarves. She is also wearing a red stocking cap. He is holding a smartphone; both are smiling at it. She holds a credit card.
Financial Health
December 17, 2018

5 tips for maximizing your credit card rewards this holiday season

From earning welcome bonuses to redeeming your points for charitable donations, credit card users have a variety of ways to get the most from their card rewards during the holidays.

A few months ago, Gideon Lakew started planning the holiday trips he takes each year to visit family members across the U.S. Always on the lookout for a good deal, he signed up for a new credit card, used it to pay for the airfare, and earned 30,000 bonus rewards points.

“I’m a big believer in using credit cards in a smart way,” said Lakew, a regional bank branch manager for Wells Fargo in Houston. “With that holiday travel coming up, I knew I’d be buying a lot of plane tickets and it could get expensive, so I was able to redeem my new card rewards bonus to help pay for the tickets.”

Lakew signed up for Wells Fargo’s new Propel® Card, which offers one of the industry’s highest rewards welcome bonuses to new cardholders: 30,000 bonus points (a $300 cash redemption value) if you spend $3,000 in qualified purchases in the first three months.

In addition to the new member bonus, Lakew said the card’s overall points redemption program resonated with him as well — you earn 3 points per $1 spent for purchases in certain categories ranging from travel (flights, hotels, ride-shares, and homestays), gas stations, and rental cars, to eating out, ordering in, and popular streaming services. You can also earn 1 point per $1 for other eligible spending.

“All in all, great for the holiday shopping,” he said.

For savvy consumers like Lakew, using the right credit card rewards strategy at the holidays can save big bucks. According to a recent article in MarketWatch, cardholders who are disciplined and typically pay off their balances each month will find that “credit cards are an awesome tool to earn extra money around the holidays via cash back and/or travel rewards.”

In recent years, increasingly sweeter rewards offers have become a magnet for new customers in the competitive credit card industry. A recent survey by J.D. Power revealed that almost half (47 percent) of credit card users who switched to a new card in the past 12 months did so for better rewards. It would not be surprising if much of that switching takes place at the holidays, said Beverly Anderson, head of Wells Fargo Cards and Retail Services business.

“From stocking stuffers to big-ticket items, there are many opportunities to maximize credit card rewards to stretch your dollars this holiday season,” she said. “There are also many lesser-known ways to spread the holiday cheer by sharing your rewards with others and redeeming points to a gift card to share with your favorite charity.”

5 tips to help make the most of card rewards in the holiday season

Pick the right card — Your credit card needs to fit your lifestyle, personal preferences, and spending habits. Consumers today are looking for a card that offers simple, inclusive rewards for the things they already do every day like dining out, getting gas for your work commute, or using popular streaming services. Consider how and where you spend, and choose the card that is the right fit for you.
Gift or donate rewards — Some card rewards programs allow cardholders to gift points or redeem their points to a gift card for sharing with their favorite charity. These programs also allow customers to share rewards with other customers, redeem points for gift cards for family and friends, or apply them as a deposit to their bank’s checking or savings account.
Get familiar with your card’s benefits — Whether you’ve just opened a new credit card or have had the same one for years, familiarizing yourself with its rewards program is key to making the most of all it has to offer. Can you earn more rewards at certain retailers? Do rewards expire? Will you get more bang for your buck with cash-back or gift card redemption? These are all important details to keep top of mind not only for holiday purchases, but for day-to-day spending as well.
Identify bonus categories — Many cards offer bonuses during an introductory period. Before you begin holiday shopping, check if there are any current bonus offerings or opportunities to earn additional points, then plan your purchases accordingly.
Use credit responsibly — Paying your card in full each month is one of the most responsible ways to manage your balance. It also ensures you get the most value from your card’s rewards program, as carrying a revolving balance often means you’ll pay interest, negating rewards earned. Make sure you maintain a realistic budget and only spend what you can afford to make certain you can pay your card in full each month.