Rewards Cards and Holiday Shopping Bliss

Bargain hunters are expected to rush into retail stores across the country this holiday season for gifts and necessities. These shoppers are further tempted by lenders that offer numerous incentives and rewards for them to use their credit cards instead of cash or debit cards.

Rewards cards during this season can save shoppers money, or just tempt them to spend unnecessarily. Remember, interest rates and fees are traditionally greater on rewards credit cards compared to cards that don’t offer the same incentives and benefits. If shoppers opt to use their credit cards this season, they should make sure to make the most of the associated rewards.

Card users should make sure the rewards match their spending habits. For example, if a card offers rewards points for travel and the cardholder doesn’t plan a vacation anytime soon, this rewards program may prove to be worthless and the shopper should consider using another card.

Shoppers should also make sure the rewards are within their budget. A $100 incentive or bonus for a $1000 purchase minimum within three months may be useless if the shopper only intends to spend $500 within the period. Such rewards are designed for shoppers to spend more, and are not in the interest of the cardholder.

Card users should make sure rewards are redeemable at their favourite retailer. If rewards points can only be redeemed at merchants that are inconvenient or out of favour, or for products the shopper doesn’t enjoy or need will also render the rewards useless. The fine print should be read and the cardholder should ascertain where points can be redeemed prior to spending the money.

Shoppers should also search for online deals, as larger or more attractive rewards may be available from Internet retailers who partner with credit card providers. Furthermore, online shopping offers additional benefits such as free shipping and generous discounts in the later days of the holiday shopping season.

As the Christmas holiday approaches, many shoppers may be encouraged to open multiple credit card accounts to assist with gifts and to reap additional benefits. But prospective credit card users should refrain from applying for too many cards, as opening multiple credit accounts will raise red flags to lenders and impair the borrower’s credit report.

Card users can benefit from rewards cards as they swipe their plastic throughout the season. Shoppers should asses each card offer to assure they select the one that benefits them the most and avoid the ones that are less likely to be used.