The month of giving is upon us, and giving gifts usually means spending money. If you’re using the right credit cards for shopping, however, spending money could mean saving money. Who doesn’t like saving money?
Every month, the Nerds round up a new set of credit card tips to help you maximize rewards and minimize costs with each swipe. Here are our tips for December 2015.
1. Get a card with a sign-up bonus
Sign-up bonuses on credit cards are common incentives to entice people to apply for a card and then get in the habit of using it. To qualify for the bonus, most cards require spending a certain amount (usually a few thousand dollars) within two to five months. That spending is then rewarded with a large sum of points or cash back, often several hundred dollars’ worth.
Because most people spend a significant amount of money this month anyway, hitting a credit card’s bonus-spending threshold is easier in December. If you make a point of combining all expenses on one card until you hit the required amount, you’ll get the bonus. It’s that simple.
2. Look at your card’s price-protection policy
Most retailers offer deals and discounts around the holidays. But what if you’ve already bought something, only to find it on sale somewhere for less than you paid? Talk about maddening.
However, many credit cards offer price protection — a perk that pays you the difference when a purchased item’s price has been reduced. Credit card price protection policies usually cover price changes for around 60-90 days after purchase, and they always require that the item in question be purchased on the card. Each card has its own rules, so check out our guide to price protection, then review your card’s specific options.
Price protection not only saves you money; it also can offer a bit of mental relief. Instead of scrambling around and combing websites waiting for the best deal on an item to appear, you can buy now and monitor any price changes down the line. This way, you can deliver the gift to its recipient on time and save money later.
3. Max out 5% rewards before it’s too late
Dec. 31 marks the end of the fourth quarter, which means if you have a 5% bonus credit card, the time available to get the maximum amount of rewards is running down. If your goal is to earn the most cash back, you’ll want to spend enough to hit the cap before the quarter closes.
For the unacquainted, 5% rotating-bonus credit cards offer — you guessed it — 5% cash back on one rotating category every quarter, and usually 1% cash back all the time on all non-bonus purchases. That’s not to say cardholders can earn unlimited 5% cash back; most cards cap bonus earnings at $1,500 in spending per quarter and offer an unlimited 1% after that threshold is met.
Categories are often fairly easy to spend on without changing your habits. Our favorite rotating-category cards — like this one and this one — regularly include gas stations, grocery stores, restaurants, department stores and other commonly shopped places. Sometimes you can even get bonus rewards on top of the 5%. So, if you’re looking to squeeze every last penny out of your card’s reward program, make sure you’re using the right card in the right places before the quarter ends.