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.