Use Credit Card Rewards to Pay for Christmas!

The holidays can be a very expensive time of year.

How much you spend greatly depends on your gift giving tendencies and how much you and your family celebrate the holiday festivities.

Luckily, I’m going to share a unique way to pay for your Christmas this year that is a bit out of the box.

Use Credit Card Rewards

Using credit card rewards to pay for Christmas isn’t something that many people consider but it can be a very effective.

I personally earn cash back rewards all year long and only cash them out when I see a big cash back balance sitting on my credit card statement.

Depending on your cash back balance, you can use those rewards to get some great stocking stuffers or an expensive once-in-a-lifetime present.

Even if you haven’t consciously saved your credit card rewards, your rewards balances could definitely help out if your budget is tight around the holidays.

You can usually use your cash back or rewards points as a direct statement credit to offset some of your Christmas spending.

For rewards programs that don’t allow statement credits, you may be to exchange your rewards or points for gift cards. Some credit cards will actually give you a discount and let you exchange $20 of cash back points for a $25 gift card.

This is a great way to maximize your points if you were going to spend money at a particular retailer or if you want to give a gift card as a present.

How to Prepare for Next Year’s Holiday Season

If you don’t have any rewards or cash back points to spend this year don’t worry. You can always start preparing for next year.

The first and most important thing to do if you want to use credit card rewards to pay for next year’s holiday season is to save up all of your points for the holiday season!

If you’re constantly cashing out small amounts you won’t have enough to cover your holiday spending.

The next thing to do is to make sure you have the best cash back or rewards credit cards for your spending situation.

My favorite easy cash back credit card is the Citi Double Cash card. You can earn 1% cash back on all of your purchases and then an additional 1% cash back on your payments.

If you don’t mind putting in some effort, some credit cards have rotating categories for the highest reward percentages. The Chase Freedom card does this with its 5% quarterly cash back categories.

Whenever you make a purchase make sure you are putting it on the credit card with the highest payout percentage in order to maximize your future holiday dollars.

This Method is Not For Everyone

If you have credit card debt or just plain know that you can’t handle having credit cards I do not suggest you use this method.

In order to actually make money using credit card rewards, you must pay your credit card balance off in full every month and never incur a late fee.

If you do not follow these rules for using your rewards credit cards, they may end up costing you more than the rewards you earned.

Have you ever used credit card rewards to pay for Christmas? Any memorable purchases? Let us know in the comments.

Like What You See?

Join the other readers who have signed up for our email newsletter! No spam, just periodic updates to help improve your finances!

About Lance Cothern

Lance Cothern, a Certified Public Accountant (CPA) licensed in the Commonwealth of Virginia, is the founder of Money Manifesto. You can read more about him here or connect with him on Facebook, Twitter, Google+ or Pinterest.


  1. We always cash in our rewards once a year for holiday spending. This year we had almost $1,100 in rewards money!

  2. I’ve save up a lot of rewards for Christmas. I just received around $100 in gift cards and have enough for around $200 more. WOOHOO!

  3. We’ve used rewards in the past and probably will in the future as well. I like being able to use them to get gift cards as gifts.

  4. We save monthly for Christmas so we won’t depend on rewards. We do have a nice healthy rewards balance right now on our main card, so we will probably use it to pay for all those extra meals out that occur when traveling/around holidays!

  5. We definitely paid for some of our Christmas with rewards this year. It was a no brainer! We turned in some of our Citicard rewards for Wal-mart gift cards and bought a multitude of gifts on someone else’s dime!

  6. What card can you use 20 points for a $25 gift card. That is a sweet deal.

  7. The main rewards that we get on our charge card includes travel insurance and many other things really from the bank. We don’t have any cash-back or similar cards. But these are just bribes for you to use the card as your debt expands the bank’s assets. The interest you pay – or rewards you get (some of which comes from the retailer anyway) are just incidental.

    • They key to pulling this off is never paying the bank a dime and never carry debt. If you pay it off in full every month all you get is the rewards.

  8. We use supermarket reward card vouchers towards presents (given that you can buy almost anything in supermarkets these days)!!

  9. Lance, you and I are on the same wave length. I also save up my rewards all year and then cash them in for Christmas. Why not! The gift cards are usually better priced and its extra money that I don’t count on.

  10. Leslie Lalande says:

    Awesome post! I wrote a similar one and how it worked out for me. Christmas cost me less than $100 out of pocket this year, so my saved Christmas budget is being transferred over to my house renovations that are currently underway.

  11. I like to use our CC rewards for fun spending! This Christmas I have cashed out a whole bunch of online reward points from surveys for giftcards, however, which I’m giving as presents.

  12. I use my rewards to redeem for gift cards to give for wedding gifts

  13. True! Christmas is expensive. For me, I save money before the holidays but I’m definitely using credit card rewards now that I know. Thanks for sharing!

  14. I used my Wells Fargo credit card rewards as a credit to my account, then used my Verizon points to get gift cards for the same amount at a cheaper rate. I got additional reward points from Wells Fargo for doing that. A real win-win!

Share Your Thoughts