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4 Credit Card Tips for Shopping Small Business Saturday

Nov. 26, 2014
Credit Card Basics, Credit Cards
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Mark your calendars — Nov. 29 is Small Business Saturday! Small Business Saturday is the Saturday after Thanksgiving, which joins Black Friday and Cyber Monday as the kickoff for holiday shopping. As the name suggests, it’s a day to shop small businesses as opposed big-box stores.

If you’re planning on hitting up your favorite local shops for Small Business Saturday, heed these four credit card tips to save yourself and the small businesses you’re patronizing some cash.

1. Get rewarded for supporting your local economy

A rewards credit card gives you cash back or travel rewards on all purchases made. You’ll typically receive 1-2% in rewards, so if you spend $12,000 a year, you’ll enjoy rewards of $120 to $240, just for using your credit card. If you redeem your rewards for cash, you can continue the cycle by spending it at your favorite independent local shops.

2. Register your AmEx for even more rewards

You can use your American Express card to earn up to $30 additional rewards in the form of statement credit. Register your qualifying card in one of these five ways. If you spend $10 or more in a single transaction at a qualifying small business, you’ll receive a $10 statement credit. You can do this in up to three stores to earn the full $30. And remember, you have to make the purchase in store, online transactions don’t count.

To find out if your favorite small businesses qualify for the additional AmEx rewards, check out this Shop Small map. You’ll receive your statement credit within 90 days, but it will be reversed if the transaction is returned or cancelled for any reason.

3. Choose credit instead of debit on small purchases

Debit transactions cost the merchant a flat rate plus a percentage of the transaction while credit transactions are percentage-based. Because of this, small transactions will likely cost the merchant more when you choose debit over credit. This may not be a big deal to the big box stores, but you may want to spare small businesses the added cost.

4. Cash is great if you can swing it, but don’t worry about it if you can’t

While debit cards cost merchants more on smaller transactions, credit cards also cost merchants a percentage of the transaction cost. This is called an interchange fee. As such, some people choose to pay with cash when shopping at small businesses. This is a nice gesture if you want to save local businesses a bit of money.

But if you can’t or don’t want to use cash, it’s not a big deal. The interchange fee is too small to significantly decrease profits of a successful small business, and 2-3% savings on your $20 purchase won’t be enough to turn a failing business around. On top of this, we’d venture to say that small businesses would rather swallow the interchange fee than lose a paying customer, so shopping with plastic is fine.

The takeaway: Shop small and smart this Small Business Saturday to earn rewards and help out local businesses. Use your credit card to earn rewards and save your local merchants the higher fees debit cards may cost them. Also, be sure to register your AmEx card for up to $30 in statement credits. Enjoy your holiday weekend!

Woman holiday shopping image via Shutterstock