- Many consumers increase their spending during the holidays.
- If you’ve done the same and now have more credit card rewards points, there are a few ways you can benefit.
- Get your rewards as cash to add to your savings, statement credit to help you pay off your credit card balance, or use it to get something special.
The holidays are often an expensive time of year. We can credit the many sales that often occur during that time as a big reason, too, and the seemingly never-ending pressure to spend on gifts, travel, and decor.
Most consumers spend more money from late November to mid-December than they do all year. And if you use your credit cards to make purchases, you may now be sitting on more rewards points than you used to. If so, here are a few ways you can take full advantage of it.
1. Cash out your rewards to top up your savings
Could your savings use a boost? If you don’t have enough money in the bank to cover at least three months of important bills, then the answer is probably yes. And in that case, it might pay to redeem your credit card rewards for cash and use that money to pay off your savings account. That way, if an unexpected debt arises in the future, you may find it easier to pay.
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2. Use your rewards to pay off a large credit card balance
To get more rewards on a credit card, you have to spend more money. It’s that simple. If you’re worried about paying off your holiday shopping, you can consider using your statement credit rewards to reduce your current balance. That can make it much easier to deal with.
3. Treat yourself to something special
Maybe you’re sitting on a huge credit card balance because of your holiday purchases, only you saved up for the holidays in advance and can cover that debt without stress. And maybe your savings are in good shape, too — you have enough money to pay off several months’ worth of bills and have more left over on different policies.
If so, there’s nothing wrong with using your credit card rewards to treat yourself to something nice. That could mean redeeming your gift card rewards at one of your favorite stores. Or, it could mean cashing in those rewards and spending them on a fun outing with friends.
The silver lining in this expensive time of year
Many people stress about spending the extra money they feel compelled to during the holidays, and understandably so. If you’re now staring at a higher-than-usual credit card balance, there’s no doubt you’re with a good company, and you may not be happy about it. But the silver lining is that you may at least have more reward points to tap.
At the same time, however, be aware that it’s never a good idea to spend extra money on your credit cards for the express purpose of collecting rewards. In the midst of chasing rewards, you could easily end up accumulating something very undesirable — credit card debt. And it’s that kind of thing that pays to avoid at all costs, no matter the time of year.
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