With about a month to go, this is looking like one expensive holiday season for shoppers.
The typical American consumer will spend $830 this year on Christmas presents, according to a recent Gallup survey, up more than $100 from a year ago. In fact, almost a third of those polled said they would spend more than $1,000 on gift giving.
While you can't necessarily convince your spouse to dream of a less expensive power tool, you do have control over how you choose to buy it. The cards below offer the best rewards, price protection and extended warranties. (Of course, rewards credit cards should only be used those who can pay off their bill each month.) Happy hunting.
There are two excellent choices for consumers during this time of year: the Discover It, which was one of Money's Best Credit Cards for Cash Back this year, and the Chase Freedom. Both cards have no annual fee and offer 5% cash back on up to $1,500 on categories that rotate four times a year -- good for $75 a quarter. You'll earn 1% after hitting the $1,500 threshold and on all non-category buys.
This quarter's categories are retailer-specific, so from October to the end of December, Discover It cardholders earn 5% back at Amazon.com, some department stores (like JCPenney and Sears), and select clothing retailers (Ann Taylor and Zara). You'll also have access to Discover Deals, the issuer's online mall, which lets cardholders earn an additional 5% to 20% on all purchases, from hundreds of retailers. Moreover, new cardholders will have all their cash back rewards for the first year doubled if they keep the card for 12 months.
The Chase Freedom actually doubled its offer this holiday season to pay 10% back on all category purchases made between Nov. 23 and Dec. 31. Cardholders reap these plush benefits at Amazon, Zappos, Audible, and Diapers.com. You can also get a $150 sign-up bonus after spending $500 over 90 days, allowing you to earn a total of $300 by the new year.
Most issuers and networks offer some form of price protection on limited purchases; that means they will reimburse you the difference when the price of an item you've bought drops within a specific period of time. There's one problem, though: Most cardholders don't know this protection exists.
"Customers are focused, and rightfully so, on usability, rewards, and interest rates," says credit expert John Ulzheimer. "The chance that you'll ever use the price protection or extended warranty attributes of your credit card account is remote," he says, adding that people "don't do a good job familiarizing ourselves with those aspects of our plastic."
What purchases get price protection? Offers vary by card company, but generally it applies to items such as clothes, shoes, electronics, and computers; jewelry and perishables usually aren't covered.
CardHub.com recently released a report identifying issuers that offer the best price protection, and Chase and Discover cards came in first and second, respectively. Chase provides maximum coverage of $500 per eligible item, about twice as much as an average policy, with maximum annual coverage of $2,500 and protection that extends up to 90 days from purchase. There's no limit on the number of claims you can make, although you can't go over the $2,500 cap. In order to file a claim, you'll need a copy of the original sales receipt and a dated, printed advertisement with the reduced price for the identical item.
Aside from the Freedom, another card you might consider is the Chase Sapphire Preferred, another Money Best Credit Card pick.
Another option for shoppers is Citi's Price Rewind policy. While its terms are less generous ($300 per purchase and $1,200 per year, and you have 60 days to receive the lower price), the claims process is less time consuming. Rather than keeping track of your own purchases and submitting claims if the price drops, you simply register an item on the Price Rewind site; Citi will let you know if the price has dropped.
Still, some experts say that, for most credit cards -- and most smaller purchases -- price protection isn't worth the effort. "Many issuers require consumers to share both the original receipt and a copy of the cheaper store's ad with a service representative," says NerdWallet credit expert Sean McQuay. "This process may be worth it for expensive purchases with large price drops, but for the majority of purchases, I'd prefer to save myself the effort. Spending hours on hold with my bank isn't how I want to spend my holidays."
This is yet another little-used perk that consumers don't take advantage of -- although Ulzheimer notes that you don't want to pick a card specifically for its warranty policy.
"Extended warranties tend to come with a lot of fine print," says ValuePenguin.com analyst Robert Harrow. "Unless a consumer takes the time to familiarize themselves with their specific cardmember agreement, they may realize too late that they aren't covered."
Still, its good to know what the cards in your wallet offer. American Express offers the best option, according to research from NerdWallet. Warranties are extended up to five additional years automatically, and don't exclude normal wear and tear.
If you've got the American Express Blue Cash Preferred, for instance -- another Money winner this year for cash-back credit cards -- you're entitled to $50,000 in coverage in a calendar year. Cardholders also receive 6% cash back on groceries up to $6,000, and an unlimited 3% back on gas and at select department stores. (All of which will lighten your holiday load.) You also get $150 cash back when you spend $1,000 in the first three months, which compensates for the $75 annual fee.