The holiday season has finally arrived and, hopefully, this year you’ll be able to safely partake in some of the festivities instead of tuning in over a video call.
This time around you might be sitting next to someone over Thanksgiving dinner or snagging deals in a store. Before spending, though, use this month as a checkpoint to review your finances.
Credit cards may offer some value, whether you’re getting out of debt or tackling holiday expenses. Here’s how to use them wisely.
Prioritize debt over holiday expenses
Check in with your budget to factor in any last-minute holiday expenses. Reviewing your finances can also confirm the status of debt. If you haven’t yet implemented a get-out-of-debt strategy for credit cards, putting one in place before the holidays makes it easier to stay on track.
With good credit (a FICO score of 690 or higher), you might qualify for a balance transfer credit card that saves money on interest. This option lets you move a balance from a high-interest credit card for a fee.
Ideally, you can get an option like the Wells Fargo Reflect℠ Card, which has a lengthy introductory offer: Get a 0% intro APR for 18 months from account opening on purchases and qualifying balance transfers, and then an ongoing APR of 12.99%-24.99% Variable APR. Intro APR extension of up to 3 months with on-time minimum payments during the intro and extension periods. For transfer requests made within 120 days from account opening, a balance transfer fee of $5 or 3% intro applies, whichever is greater. After that, the card charges up to 5% of each transfer amount, with a minimum of $5.
Feast on rewards
Without credit card debt, you can create a rewards strategy for planned holiday expenses, like that Thanksgiving feast.
A credit card that earns a rewards rate of 2% or more on groceries can offer decent value for your meal. The $0-annual-fee Capital One SavorOne Cash Rewards Credit Card, for instance, offers rich rewards whether you’re cooking at home or dining out on Thanksgiving. It earns 3% back on dining, eligible streaming services, purchases at grocery stores and entertainment. All other purchases earn 1% back.
Combining credit card rewards with a cash-back shopping app like Ibotta makes it possible to rake in more cash back. You’ll have to activate offers and upload a receipt, but the money adds up over time.
If your holiday budget allows for more spending than usual, it could be a good time to open a new rewards credit card. Holiday shopping can make it easier to hit the minimum spending requirement on a new card, and many credit card bonuses are sky-high this month.
Get more value on sales this month
November packs abundant sales with Veterans Day, Black Friday, Cyber Monday and Small Business Saturday. If you’re planning on seizing some deals, create a plan to avoid overspending. Whether you’re shopping for yourself, the household or holiday gifts, stay on track by writing a list that budgets the amount per item.
As long as you’re not on a debt repayment journey, you can put those purchases on a flat-rate rewards credit card to get more value. The Wells Fargo Active Cash℠ Card, for example, offers 2% cash back on all purchases. For new cardholders, there’s also an introductory offer: Get a 0% intro APR for 15 months from account opening on purchases and qualifying balance transfers, and then the ongoing APR of 14.99%-24.99% Variable APR. The nice sign-up bonus can also defray some costs: New! Earn a $200 cash rewards bonus after spending $1,000 in purchases in the first 3 months.
Nerdy tip: Stack rewards by checking merchant offers with your credit card issuer or using one of the cash-back shopping apps mentioned previously. For example, you could use the Wells Fargo Active Cash℠ Card and potentially find a discount with certain merchants through My Wells Fargo Deals.
Plan your end-of-the-year giving
This month, if your budget permits, Giving Tuesday can offer a reminder to plan charitable gifts. Consider donating points or miles that will go unused to charity. You can’t get a tax deduction on these donations and rewards may lose value when redeemed for charity, but it’s still a better option than allowing them to expire.
If you’re making a direct tax-deductible donation, a flat-rate rewards credit card can offer some money back for your generosity. The $95-annual-fee Capital One Venture Rewards Credit Card, for example, earns 2 miles per dollar spent on most purchases. With a large donation, you could potentially be adding miles toward your next vacation. Putting the donation on the credit card is a good idea only if you can pay it off in full to avoid interest charges.
This post was originally published on Nerd Wallet
