NEW YORK (MainStreet) — Sure, hiding your credit card is one way to keep yourself from falling into debt, but consumers with a solid credit history shouldn’t necessarily put away the plastic until January. In fact, there are several reasons why a credit card should be your payment method of choice this holiday shopping season. MainStreet looks at the ways your credit cards can help you save on gifts this year.
You can earn ample rewards.
Credit cards generally offer consumers anywhere from 1% to 5% cash back on purchases, and thanks to the nation’s credit crunch and the Fed’s new cap on debit card swipe fees, rewards programs have gotten much more lucrative. Popular rewards cards with no annual fees, like the Chase Freedom and the Discover More Card, are offering 5% back on all department store purchases made between October and December.
Savvy shoppers can also net even higher cash-back rewards when shopping at their issuer’s online shopping mall. UPromise.com, for instance, is currently offering its UPromise World Class Master Card cardholders up to 21% cash back on purchases made at the online mall through Dec. 31, while Chase’s Ultimate Rewards mall is letting its cardholders score 25% off on merchandise provided by Best Buy (Stock Quote: BBY) when they pay with rewards points on CyberMonday.
“Bonus point malls actually earn credit card companies a percentage of their sales,” Tim Chen, CEO of the credit card ranking site Nerd Wallet, told MainStreet back in February. “This is why during peak periods, such as Christmas or Valentine’s days, issuers get competitive and offer some of their best deals.”
Rewards can be used toward online purchases.
Earning rewards isn’t the only thing that’s easier around the holidays. Cardholders can apply points toward purchases made in these online malls as well.
Additionally, this year Discover (Stock Quote: DFS) has partnered with Amazon.com to let its customers pay for purchases using their reward points seamlessly at checkout. As part of the promotion, the company is also letting cardholders earn double cash rewards on Amazon purchases of up to $250 each month through the end of the year.
American Express (Stock Quote: AXP) cardholders can also pay for purchases on Amazon with their rewards points, a partnership that started back in 2010.