Many companies featured on Money advertise with us. Opinions are our own, but compensation and
in-depth research determine where and how companies may appear. Learn more about how we make money.

By Jason Steele
Updated: June 4, 2021 4:14 PM ET | Originally published: December 17, 2020
Money; Getty Images

Just like many other industries, it's been a rough year for credit cards. But card issuers are still hoping to end this year with a strong holiday season. This means that there are plenty of great deals currently available for holiday shoppers. So as the holiday shopping season comes to a close, it's not too late to leverage your credit cards to save money on your purchases, your interest charges or both.

Using Credit Cards to Save Money on Holiday Purchases

Here are several ways you can use your credit cards to save money on your holiday shopping:

1. Look for bonus rewards. Many reward credit cards issuers offer bonus points, miles or cash back for purchases from stores that can be great for holiday shopping. For example, the Chase Freedom (which is no longer available to new cardholders) and Freedom Flex℠ cards are both offering 5% cash back on up to $1,500 spent in purchases from Walmart and Paypal through the end of 2021. Just note that you have to go online and activate this deal. Similarly, the Discover it card is offering 5% cash back on up to $1,500 in combined purchases at Best Buy, Amazon.com, Walmart.com and Target.com.

2. Consider the right store credit card. While nearly every major retailer offers a co-branded store card, many aren't that great. But if you're considering a store card, look for ones that offer more than just 2% or 3% rewards for in-store purchases. For instance, both the Target RedCard and the Amazon Prime Rewards Visa Signature both offer 5% cash back on all store purchases, all year.

Ads by Money. We may be compensated if you click this ad.AdAds by Money disclaimer
Credit Repair companies can help you repair and improve your credit so you can apply for the credit card of your choice.
Bad credit can weigh you down. Find out what credit repair can offer you.
HawaiiAlaskaFloridaSouth CarolinaGeorgiaAlabamaNorth CarolinaTennesseeRIRhode IslandCTConnecticutMAMassachusettsMaineNHNew HampshireVTVermontNew YorkNJNew JerseyDEDelawareMDMarylandWest VirginiaOhioMichiganArizonaNevadaUtahColoradoNew MexicoSouth DakotaIowaIndianaIllinoisMinnesotaWisconsinMissouriLouisianaVirginiaDCWashington DCIdahoCaliforniaNorth DakotaWashingtonOregonMontanaWyomingNebraskaKansasOklahomaPennsylvaniaKentuckyMississippiArkansasTexas
Talk to a Credit Repair Expert

3. Use your purchases to qualify for a new account bonus. Traditionally, most reward credit cards offer generous bonuses when you open a new account. These bonuses can be worth hundreds of dollars, but with most cards, you only receive them after them after you meet a minimum spending requirement. For example, the Chase Sapphire Preferred currently offers 100,000 bonus points, worth $1250 in in travel rewards (when redeemed through Chase Ultimate Rewards), after you spend $4,000 within first three months of account opening. This spending threshold could be a lot easier to reach if you add in some of your holiday shopping.

4. Look for shopping deals from your card issuer. Several credit card issuers offer deals from particular merchants. For example, when you login to your American Express account, you'll be presented with the ability to enroll with dozens of offers from specific merchants that can offer you substantial cash back or additional points or miles. And Chase has its own offers on its website and mobile app. Check to see if your credit card issuer has a similar program.

5. Leverage cardholder benefits. Most credit card users have little idea of what benefits are included with their cards, but it can help to be familiar with them when you're using it for holiday shopping. For example, several credit cards offer extended warranty policies that can add one or two years to your manufacturer's warranty. Knowing that you already have this coverage will make it easy to decline the costly, optional extended warranties offered by some retailers. And if you're buying a new smartphone, check to see if your credit card comes with mobile phone insurance, as an increasing number of cards now do.

Saving money on interest charges

About half of American credit card users will carry a balance on their cards during all or part of the year, and increased spending during the holiday shopping can certainly contribute to credit card debt. The simplest way to avoid credit card interest charges is to pay your entire statement balance in full. But if that's not possible, here are two ways to minimize the interest charges that you pay on your cards:

1. Use a card with 0% APR on new purchase. Many credit cards offer new account holders interest-free financing on new purchases. By law, these promotional financing offer must last at least six months, but the best offers can extend to 15 months of more. For example, the Chase Freedom Flex currently offers 15 months of 0% APR financing on new purchases (after that, 14.99%-23.74% variable APR), and the U.S. Bank Visa® Platinum card is even better, with 0% APR for 20 billing cycles (after that, 13.99%-23.99% variable APR).

2. Look for a balance transfer credit card. Once you've incurred credit card debt that you're unable to pay off quickly, you can reduce or eliminate your interest charges by using a credit card with a 0% APR financing on balance transfers. The U.S. Bank Visa® Platinum card is also a good choice, as it offers 0% APR for 20 billing cycles (after that, 13.99%-23.99% variable APR) on balance transfers, with a 3% balance transfer fee. Be sure to use these promotional financing offers to pay off your balance, and not to postpone doing so.

Ads by Money. We may be compensated if you click this ad.AdAds by Money disclaimer
A credit repair company could improve your chances of getting approved.
Credit Repair companies, like Credit Saint, specialize in finding and helping you remove mistakes on your report to help you improve your credit.
GET STARTED

Bottom line

The holiday shopping season isn't over yet, and there's still a chance to save money this year. By leveraging the rewards, benefits and financing options offered by your card, you can save more money on your holiday shopping than you might have ever before.

More from Money:

The 21 Smartest Money Moves to Make in 2021

9 Steps to Take Now That Will Prepare You for Buying a Home in 2021

Retirement Reminder: Max Out Your 401(k) Contributions Before the End of the Year