ewsba.se
Many credit cards offer some kind of rewards these days, from simple cash back to travel rewards. With family gatherings and gift-giving, the holidays can be a great time to earn a stockpile of credit card points.
You don't have to be a credit card expert to do so (you can leave the travel hacking to the CNBC Points Pro). Understanding the basics of how your card earns rewards and common ways to redeem them can help you maximize them.
Below, CNBC Select outlines what you need to know about your rewards credit card ahead of shopping this holiday season.
One of the first steps to understanding the credit cards in your wallet is knowing the type of rewards they earn — which can help you choose the right card for each gift. These tips can also help you choose a card to apply for.
Many cards offer a base rewards rate of 1X on purchases, but this is typically combined with elevated rewards on specific categories, whether that's groceries, online purchases or gas.
Bonus category cards are often at their best when you consistently spend a larger portion of your income on one of the categories. For example, if you spend a lot on online shopping year-round, not just around the holidays, the Blue Cash Everyday® Card from American Express is a great option. It earns 3% cash back on U.S. online retail purchases on up to $6,000 in spending per year, then 1% back. Cash back is received as Reward Dollars, redeemable for statement credit or for other select options.
Access above average rewards for groceries and gas, plus receive a 0% intro APR for 15 months from account opening on purchases and balance transfers, then 19.74%-28.74% Variable.
As High As $200 Cash Back. Find Out Your Offer.
See rates and fees, terms apply. Read our Blue Cash Everyday® Card from American Express review.
The Blue Cash Everyday® Card from American Express has no annual fee and bonus rewards on a wide range of common expenditures. On top of that, you also have access to an intro-APR offer for purchases and balance transfers. So this card can help you save in a variety of ways.
Highlights shown here are provided by the issuer and have not been reviewed by CNBC Select's editorial staff.
Either $5 or 3% of the amount of each transfer, whichever is greater.
2.7% of each transaction after conversion to US dollars
Bonus category cards typically aren't the best fit for someone who spends inconsistently or in small amounts across various categories. And whether or not your holiday spending counts toward a bonus category depends on the merchant category code, or MCC, which is how credit cards classify a specific business. Some credit card issuers have online documentation that shows qualifying purchases per MCC, so you can double-check beforehand.
Some cards have a rotating element to their rewards. Typically, a rotating bonus category card will earn 5% cash back on new categories each month or quarter, up to a specific spending threshold.
A great example is the Discover it® Cash Back Credit Card. You’ll earn up to 5% cash back within categories that rotate every quarter (as long as you activate), on up to $1,500 in quarterly spending, then 1% back. Popular categories include grocery stores, Amazon, transit and streaming services.
Remember, you typically have to activate categories each quarter to earn the full 5% cash back. So, if you plan on using a rotating bonus category card for gift purchases, log in to your online account and activate before you start swiping.
3% for the first 15 months; 5% at a promotional APR that Capital One may offer to you at any other time
If you're not interested in playing category roulette, a simple, flat-rate cash-back card is likely your best option. These cards offer a consistent rate of cash back, typically 1.5% or 2%, on every purchase — meaning you won't have to track categories to get the best rate.
The no-annual-fee Citi Double Cash® Card made our list of the best 2% cash-back credit cards, earning 1% back when you make a purchase and another 1% when you pay your bill. That means you can earn 2% back on everything from a Lego set for your nephew to a brand-new laptop for your teen.
Receive an intro APR for 18 months on balance transfers and earn at least 2% cash back on every purchase.
What makes the Citi Double Cash® Card special is that it sits near the top of its class in several categories. It is an excellent option if you want flat-rate rewards, a balance transfer intro-APR or no annual fee.
There is an intro balance transfer fee of 3% of each transfer (minimum $5) completed within the first 4 months of account opening. A balance transfer fee of 5% of each transfer ($5 minimum) applies if completed after 4 months of account opening.
Many major credit card issuers, like Chase, Amex and Capital One, offer their own online portals where you can use your rewards and manage credit card perks.
Credit card portals are most commonly used to redeem rewards, whether it's securing a statement credit, booking travel or transferring points to hotel and airline partners.
When it comes to travel — perhaps you're looking into booking a trip as a gift for a loved one — Bilt has one of the most valuable point currencies on the market. The value of Bilt Points mainly lies in its transfer partners, of which it has 25+. You can move Bilt Points to other mainstream hotels or airlines and potentially book cheaper travel.
Some credit card portals offer exclusive deals that you can activate in advance, typically ranging from 5% to 10% off, or the cash equivalent. For example, several Chase cards, like the Chase Sapphire Preferred® Card (see rates and fees), have access to Chase Offers, a program that offers brand-specific discounts. Simply activate the offer and earn rewards on related spending.
With Points Boost, your rewards will be worth up to 1.5X on thousands of top-booked hotels and flights from select airlines through Chase TravelSM.
See rates and fees. Terms apply. Member FDIC.
Read our Chase Sapphire Preferred® Card review.
The Chase Sapphire Preferred® Card packs a punch for a $95 annual fee card, offering annual travel credits, comprehensive travel protections, flexible rewards and more.
Either $5 or 5% of the amount of each transfer, whichever is greater
At the time of writing, a few targeted Chase Offers include 20% cash back with Sony Electronics and 10% back on Pandora Jewelry. Before you make any purchases, it's worth checking your online account for any offers and activating them.
Don't apply for a new card around the holidays just because it earns 1% more in a category you plan to spend in. Realistically, that small percentage likely won't amount to much throughout the whole year.
For example, if you compare earning 2% on groceries vs. earning 3% over the course of a year, the difference is pretty negligible. Spending $5,000 a year on groceries at a 2% cash-back rate would earn you $100 in rewards, compared to $150 back at a 3% cash-back rate — or a $50 difference.
The real value comes when you earn a large multiplier in categories where you were previously earning just 1%. If you can jump from that to 5% with a rotating bonus category card, for example, that could be significant.
At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every credit card article is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of credit products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics.
Catch up on CNBC Select's in-depth coverage of credit cards, banking and money, and follow us on TikTok, Facebook, Instagram and X to stay up to date.
For rates and fees of the Blue Cash Everyday® Card from American Express, click here.