Why Use a Rewards Card During the Holidays?
The holidays are one of the biggest spending seasons of the year. From gifts to travel expenses, your purchases can add up fast. Using a card that builds rewards allows you to turn that spending into benefits like cash back, points or special offers.
It’s important to keep in mind that a rewards credit card should only be used if you can pay off the balance in full when your statement arrives. Carrying a balance can lead to interest charges that outweigh any rewards you earn. If you’re not confident you can pay in full, stick with a rewards debit card instead.
Types of Rewards Cards
Not all rewards cards are the same. Here are the most common types to choose from:
- Cash Back Cards. Cash back is one of the simplest and most popular rewards. For example, you might earn 1% to 3% cash back on every purchase you make. Some cards even offer higher percentages for categories like groceries or dining, while others let you choose bonus categories based on your spending habits. During the holidays, cash back rewards can add up quickly—especially if you’re buying gifts or hosting family dinners.
- Points Cards. With points-based rewards cards, you earn a certain number of points for every dollar spent. Points can often be redeemed for gift cards, merchandise, or even statement credits—perfect for offsetting holiday expenses or turning those rewards into gifts for family and friends.
- Travel Cards. Travel rewards cards allow you to earn miles or points for flights, hotel stays, car rentals, and even vacation packages. If you’re visiting family or planning a winter getaway, these cards can help make your travel more affordable—plus, many offer perks like airport lounge access and seat upgrades.
When it comes to earning rewards, credit cards usually steal the spotlight, but did you know that some debit cards offer perks too? The key is finding a bank, like BankFive, that makes it possible. Here’s how credit and debit rewards stack up:
- Rewards Credit Cards: Credit cards often deliver higher reward rates and extra benefits like purchase protection or extended warranties. However, they require discipline. If you don’t pay your balance in full, interest charges can quickly erase any rewards you’ve earned.
- Rewards Debit Cards: Debit cards pull funds directly from your checking account, so you’re spending money you already have. That means no risk of credit card debt, but it’s still important to monitor your balance to avoid overdraft fees or insufficient funds charges. While debit card rewards programs typically offer smaller perks than credit cards, they still provide valuable incentives without compromising your financial stability.
A little planning goes a long way when earning rewards. Here are some smart strategies to help you earn more and spend wisely:
1. Plan Your Purchases. Start with a list of what you need for the holiday—gifts, decorations, food, airfare, accommodations, or anything else. Planning ahead helps you avoid impulse buys that can derail your budget and reduce the value of your rewards. It also helps you take advantage of any special promotions your card might offer.
2. Look for Bonus Categories. Many rewards cards offer extra points or cash back for certain types of purchases. Check your card’s offers and see if you can align your spending with these bonus categories. It’s an easy way to multiply your rewards without spending more.
3. Redeem Strategically. Don’t let your earned rewards sit unused! Think about what will bring you the most value. You might use points for gift cards you can give as presents, or redeem cash back to offset your holiday expenses. If you’re planning a trip after the holidays, consider using points or miles to cover your travel costs.
4. Combine Rewards with Store Promotions. Pair your rewards card with holiday sales for extra savings. Choose retailers that offer discounts or loyalty perks so you can earn rewards and snag additional deals at the same time.
5. Set a Budget and Track Your Spending. Rewards are great, but they’re not worth going into debt for. Avoid overspending just to earn rewards. Instead, set a holiday budget and monitor your purchases. Many card issuers offer online tools to track spending and rewards in real time. If you’re worried about overspending, consider using a debit rewards card instead of a credit card this season.
6. Pay Attention to Expiration Dates. Some rewards expire if you don’t use them within a certain timeframe. Check your account and redeem your rewards before they disappear. You don’t want to let your hard-earned perks go to waste!
Make Your Holiday Spending Work for You
Don’t let your holiday spending go unrewarded this season. By using a rewards card responsibly, you can turn your purchases into cash back, points, or travel perks. And with BankFive’s rewards credit cards and debit card rewards program, it’s easier than ever to make every dollar count. Explore our rewards options today and start earning while you shop this holiday!