8 ways to use credit card rewards to stay on budget during the holidays

Americans expect to spend an average of over $1,000 this holiday season. If that's your plan, too, let your credit card points do some of the shopping instead. It's a strategy common among rewards cardholders.

"This is probably our customers' favorite time of year when it comes to rewards," says Tammy McIntosh, senior vice president of customer rewards at PNC Bank. "They save throughout the year just for the holidays. That's when when we see redemptions just spike."

There are plenty of ways to tap those rewards to help you stay within your budget, McIntosh says. Remember that you may not always maximize the dollar value of your points, but it’s better than emptying your wallet, or worse, racking up credit card debt you can’t pay off.

Here are eight ways to use points to alleviate your holiday spending:

Some retailers partner with credit card rewards programs so you can pay for your purchase with points. For instance, you can use your American Express, Chase, Citi and Discover rewards for Amazon purchases. You can also use Amex rewards for online purchases at Staples, Walmart, Best Buy and Rite Aid, among others.

You can also use Citi points at Best Buy and 1-800-Flowers.com, but there’s a hitch. You need to pay first with your card. The points are deducted later, and you get a statement credit within days of the purchase.

They may be impersonal, but gift cards are consistently the most popular and most requested present for at least a decade, according to the National Retail Federation, a trade association. They are also practical and easy to send.

Most credit card rewards programs allow you to redeem your points or rewards for gift cards from major retailers, often at a discount. 

McIntosh sees procrastinators take advantage of sending digital gift cards at the last minute. Others redeem their points for a card and use it themselves at the store to buy presents for loved ones, she says.

If you don’t have enough points, here’s a way to supercharge getting rewards while you shop. Instead of purchasing directly from a retailer’s website, go through your credit card’s online shopping portal where you can shop at major stores like Banana Republic and Best Buy. When you buy through the portal, you earn extra rewards points. You can use those later for a statement credit to reduce your total spending.

Browse your card issuer’s merchandise catalog for possible gift ideas. These catalogs often feature, luggage, jewelry, electronics and even toys that can be bought using rewards or points. Generally, you ultimately pay more for these items than if you purchased them directly from a store. But if you have no other use for your rewards and need to stick to a budget, this is a convenient way to do it.

For those recipients on your list that have everything already, buy an experience with your rewards. For instance, get concert or other event tickets from Live Nation using your Citi ThankYou points, or from TicketMaster using your American Express rewards. 

"We see customers will use rewards to book travel, but not for holiday time," McIntosh. "They book a Disney cruise and give that as a gift that maybe doesn’t happen until February."

If you promise to “be home for Christmas,” use rewards to get there. Points can be used to book a hotel near family or fly your special someone to you. If you don’t have enough to cover a flight, some issuers, like Citi and American Express, let you use rewards to pay for some or all of a purchase on Expedia.com. Capital One cardholders also can use rewards they earn during the holidays to pay for travel purchases they made 90 days before.

Embrace the spirit of the season and donate your points in your loved one’s name. It’s tax-deductible, too. Most issuers allow this, but some offer more options than others. For example, you can choose from over a million charities to donate your American Express rewards to. But you can donate to only three charities with your Citi card: American Red Cross Disaster Relief, American Red Cross International Services, and Smile Train, a not-for-profit that provides cleft repair surgery in developing countries.

"The fallback is just redeeming for cash. They can go out and buy a gift or travel and redeem for cash," says McIntosh. "It still feels pretty rewarding because that cash didn’t come out of their wallet or their budget."

 

November 14, 2018

Sources: USA Today

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  • Sanlam's list of the 14 best income UK funds yields 5.6%

    Sanlam's list of the 14 best income UK funds yields 5.6%

    ld but when it comes to long-term returns they are among the most reliable.</p><p>The Barclays Equity Gilt study shows £100 invested in the UK stock market in 1899 would have been worth £16,004 by 2017 - but would have reached £2,635,984 with dividends taken into account and reinvested.</p><p>The tricky part for investors is navigating their way through the stock market and spotting the companies that can deliver over time – or the fund managers who are good at unearthing them.</p><p>If you can find an investment that pays out dividends as reliable as clockwork then the returns will build up over time</p><p>For the latter, there are a few handy reports that come out each year and the latest edition of one of them Sanlam’s White List has just landed.</p><p>It looks at total income, capital growth and volatility over the past five years in an attempt to name the best prospects for investors. The top 14 fund on it have an average yield of 5.6 per cent.</p><p>Sanlam names Troy Trojan Income, Axa Framlington Monthly Income and Miton UK Multi Cap as its top three UK income funds.</p><p>The Sanlam study is worth a look for some pointers, but there is, of course, the question of why would you even use a fund manager?</p><p>Plenty of investors choose to research and buy individual shares themselves, but the reality is that many people don’t have the time to do that properly.</p><p>For those who would rather outsource the hard work to someone whose job it is and has greater resources to do it, a fund or investment trust is a wise move.  </p><p>You could pick a tracker that simply follows the stock market and picks up the dividends along the way – the broad UK stock market index, the FTSE All-Share, currently yields a chunky 4.29 per cent.</p><p>However, that does mean relying heavily on a fairly limited number of companies to do the dividend heavy lifting – and these tend to be big, mature firms with limited opportunities for growth, such as Shell, BP, HSBC and GlaxoSmithKline.</p><p>Alternatively, you could find a fund or investment trust manager who goes looking for dividend prospects among smaller and medium-sized companies with headroom to grow.</p><p>This is something that is well worth bearing in mind when weighing up funds or investment trusts and Sam Lees, at Fund Expert argues that ‘the consistency of growth in the income a fund pays out’ is as important as any of the measures in the Sanlam study.</p><p>This is one of the reasons why I favour funds and particularly investment trusts that look for dividends lower down the company scale than among the giants of the FTSE 100.</p><p>What’s also important is avoiding the dividend traps.</p><p>These are the companies that look like they pack a hefty payout, but only have a big eye-catching yield due to a collapse in their share price - and a dividend cut or worse is on the way.</p><p>In my early days of investing, my first experience of a dividend trap was HMV. I was lured into its shares by an 8 per cent yield, thinking that as the last remaining music store on the High Street the firm couldn’t possible fail. I was wrong and it went bust (and recently did so again).</p><p>I imagine there were more than a few income fund managers who also made that HMV mistake, but the advantage of a fund or trust is that your money is spread around, so at least you are not too heavily affected by such a collapse.</p><p>Investing for income through an investment trust carries an extra advantage too, they are able to hold over some of their payouts in the good years to help cover the bad.</p><p>Investing has proven to be the best way to beat inflation and grow your wealth over the long-term, but how do you get started?</p><p>And if you do already invest but feel you’ve lost track of your goals or ended up with a jumble of investments, how can you improve things?</p><p>In this podcast, Simon Lambert and Georgie Frost dive into how to be a smarter investor.</p><p>They bust the jargon and look at why people should invest, how to get started, what investments you can choose and how to find the right ones for you.</p><p>Do you want to automatically post your MailOnline comments to your Facebook Timeline?</p><p>Your comment will be posted to MailOnline as usual.</p><p>Do you want to automatically post your MailOnline comments to your Facebook Timeline?</p><p> We will automatically post your comment and a link to the news story to your Facebook timeline at the same time it is posted on MailOnline. To do this we will link your MailOnline account with your Facebook account. We’ll ask you to confirm this for your first post to Facebook.</p><p>Part of the Daily Mail, The Mail on Sunday &amp; Metro Media Group</p>

    1 February 07, 2019

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