Here are 11 ways to save on your holiday shopping

Holiday shopping is equal parts exciting and stressful. For many people, that stress isn’t just about running around figuring out what gifts to get their loved ones — it’s also about making sure their finances don’t take a serious hit as a result of increased spending. A survey conducted by Prosper Insights & Analytics for the National Retail Federation in October 2023 found that consumers expect to spend $875 on average for seasonal items this year. The bulk of that — $620 — will be spent on gifts. If you’re among the many who will be hitting the stores (whether online or in-person), you may be looking for creative ways to save on your purchases. CNBC Select explains how you can leverage credit cards, shopping portals and other resources to save on holiday shopping, either for immediate savings or in the longer term.

Sign up for a new credit card with a big welcome bonus

Many of the flashy credit cards with big welcome bonuses require new cardholders to spend thousands of dollars within a few short months. For some, that’s relatively easy with everyday purchases, but for others, it may not be so simple. So, signing up for a new card when you know you’ll be making large purchases can be a good idea. And holiday spending is one of those occasions. The best welcome bonuses tend to earn points or miles that you can redeem for travel. So while this doesn’t provide immediate savings on your holiday shopping, it can be a great sort of “rebate” for the future when you plan a trip. One of the top welcome bonuses currently available is offered by the Capital One Venture Rewards Credit Card (see rates and fees), which earns new cardholders 75,000 miles after spending $4,000 on purchases within three months from account opening. This bonus is worth at least $750 if redeemed for travel purchases at 1 cent per mile, but could potentially be worth even more if you transfer the miles to Capital One’s airline and hotel partners. The card has a $95 annual fee, but its perks, like two complimentary airport lounge visits each year and a Global Entry or TSA PreCheck® application fee credit every four years worth up to $100, help offset the fee.

Take advantage of a credit card’s introductory APR offer

If you’re making large purchases that you know you won’t be able to pay off in full when the bill arrives and you have a good credit score, then consider signing up for a card with a 0% intro APR period. These cards offer a designated interest free period (usually six to 21 months) on purchases and/or qualifying balance transfers. Some cards even have a 0% intro APR and a welcome bonus — the best of both worlds. One example is the Capital One Quicksilver Cash Rewards Card (see rates and fees), which has a new cardmember offer of a $200 cash bonus once you spend $500 on purchases within three months from account opening and a 0% intro APR for 15 months on purchases and balance transfers (19.99% to 29.99% variable APR after that). While it’s best to pay your credit card bill in full each month, if you didn’t set aside enough in advance for holiday shopping, a low or 0% intro APR card can help you save money on expensive interest charges. Just be sure to pay off the balance before the end of the intro APR period.

Maximize credit card bonus spending categories

One of the best ways to maximize your holiday spending is to use a credit card that offers bonus points or bonus cash back for purchases in certain categories, such as supermarkets, drugstores or Amazon. Instead of earning 1 point per dollar or 1% cash back on purchases in these categories, you may earn 3x or 4x back, depending on the card. For example, the Blue Cash Everyday® Card from American Express is ideal for anyone who like to do most of their holiday shopping online. It earns 3% back on U.S. online retail purchases on up to $6,000 in purchases per year (then 1%). Some cards also have rotating quarterly bonus categories where you can receive 5% back on up to $1,500 of spending each quarter. For these cards, you will need to activate the category bonus each quarter. Examples of 5% cash-back cards with rotating bonus categories include:

• Discover it® Cash Back: Bonus category for October to December 2023 is Target.
• Chase Freedom Flex: Bonus categories for October to December 2023 are wholesale clubs, select charities and PayPal.

Should your purchase not classify under any bonus categories, then use the highest flat-rate rewards card you have. Many cards offer an unlimited 2% or 2x points on all purchases, which eliminates the need to worry about which card is best for which purchase.

Use an online shopping portal

Shopping portals allow you to earn bonus points, miles or cash back at online retailers. These bonus rewards are in addition to anything else you may earn with your credit card. It just takes one extra step to visit the portal’s website to click through to be redirected to the retailer’s website. Some popular shopping portals include Rakuten for cash back (or American Express Membership Rewards points) and AAdvantage eShopping for American Airlines miles. If you’re apt to forget to seek out a portal before doing your online shopping, then you can install a browser extension from your favorite portal. This extension adds a button on your web browser that will prompt you to activate cash back or travel miles to your purchase. Some browser extensions, such as Shop TODAY Savings, even automatically find and apply coupons.

Take advantage of card-linked offers

Many of the major credit card issuers have programs that provide additional savings at select merchants when you link your card to that offer. Typically, these offers are targeted and can be found when you sign into your online account. You will need manually add offers to your card. Then, when you make the purchase at that merchant using the credit card with the offer attached, you receive bonus rewards or a statement credit back to your card. You’ll want to be sure to read the fine print for any exclusions and take note of the offer’s expiration date. Examples of these programs include:

• Amex Offers: These are card-linked offers from American Express. Deals typically require you to spend a minimum amount to receive money back, such as “spend $100 or more, get $20 back.” Depending on the card, sometimes deals may be in the form of bonus points instead of cash back, such as “spend $100 or more, get 2,000 Membership Rewards points.” Less frequently, you may see deals for a percentage off your purchase. These deals may not have a minimum spending requirement, but usually have a maximum cash-back amount, such as “get 8% back on purchases, up to a total of $250.”
• Chase Offers: These are card-linked offers for Chase credit cards. They are frequently percentage deals with a maximum amount of cash back listed in the fine print, though sometimes deals can be a flat amount of cash back, depending on the merchant. Unlike Amex, Chase Offers have not historically provided deals with bonus points.
• Citi Merchant Offers: Citi is similar to Chase in that its offers include flat-dollar amounts of cash back or a percentage back when you spend a certain amount.
• BankAmeriDeals: These are card-linked offers from Bank of America that work similarly to Chase and Citi. The big difference here is that BankAmeriDeals can be added to your credit or debit cards.

Stack deals whenever possible

You can use a combination of the above methods to save even more. Let’s say you’re making an online purchase from a retailer that accepts PayPal, so you use your Chase Freedom Flex for 5x points or 5% cash back this quarter. And if you don’t currently have that card, then you could open it to earn the current welcome bonus of $200 cash back after you spend $500 on purchases in your first three months from account opening. Plus, earn 5% cash back on combined gas station and grocery store purchases (excluding Target and Walmart) on up to $12,000 spent in the first year. If the retailer also has a Chase Offer that you’ve added to your card, then you’ll receive additional cash back as a statement credit. And, before you shop, be sure to access the retailer’s website by clicking through a shopping portal for more cash back.

Redeem points or cash back for your purchases

If you already have a rewards credit card with a balance of cash back or flexible points that you can redeem as cash, you may want to consider doing so to save on your holiday shopping. You can typically get more value out of your points by using them for travel — especially on a card like the Chase Sapphire Preferred where you can transfer points to travel partners — but, if you have more points than you know what to do with or you just don’t travel very often, redeeming rewards to pay for purchases can be a way to save. Some credit card programs may also allow you to redeem your rewards for gift cards or even for merchandise, but often you’ll get less than 1 cent per point in value for those types of redemptions. Other cards may allow you to “pay with points” directly in-store or while shopping online, but you’ll want to make sure you’re getting a good value. Using your credit card for the purchase and then redeeming cash back as a statement credit at 1 cent per point is usually the better option if you’re going this route.

Use a credit card with built-in shopping protections

When buying expensive items, like electronics or appliances, you may want to consider using a card with shopping protections, such as an extended warranty, purchase protection and return protection. While these benefits seem similar, there are some slight differences between them. Extended warranty coverage can protect you in instances when your item breaks or stops working. While your purchase may come with a warranty from the manufacturer, your credit card can extend that warranty beyond the manufacturer’s time. For example, the American Express Gold Card adds an extra year to the original manufacturer’s warranty. Purchase protection provides limited-time coverage in case your item is stolen or damaged. And return protection extends the time you have to receive a refund for a purchase or allows for refunds in cases where the merchant won’t accept a return. This tip won’t save you money immediately, but it can come in handy in the long run. Should your items be lost, damaged or stolen, utilizing these credit card benefits can help you recoup your money or replace your items.

Set price alerts for specific products

If you plan to do most of your holiday shopping online, one of the easiest ways to make sure you’re not overpaying for a particular product is to set up an alert so you know when there’s a price drop. There are a number of browser extensions that can make price tracking a simple process. For example, if you frequently shop from Amazon, consider using CamelCamelCamel. It monitors prices on millions of products on Amazon and also you to view price history charts to get an idea of price changes over time. PayPal Honey is another option if you’d also like to track prices on other sites.

Organize a holiday gift exchange and set a price limit

If you have a large family or friend group, holiday shopping can sometimes be more costly than you’d like when you have to purchase a gift for every single person. This is where holiday gift exchanges can come in handy and alleviate some of that pressure. For example, consider doing gift exchanges with friends or coworkers. This way, everyone in the group gets just one gift for one person, which can save you money but still allow you to have an exciting gift-giving experience. You can also set a spending limit for the gifts, which can take away some of the pressure of feeling like you need to get someone a super pricey gift.

Save up for a holiday shopping fund

The earlier you can start saving up cash for holiday shopping, the better. By putting away small, non-intimidating amounts of money throughout the year — think $5 one week, $10 another week — you can give yourself an extra cushion of money to use when buying gifts, and it really adds up. It might be too late to start a holiday savings account this year, but you can make it a point to start one in January for holiday shopping next year. Use any savings method you like, but be sure to put the money into a high-yield savings account — like LendingClub High-Yield Savings or UFB High Yield Savings — so you can grow your savings faster thanks to the higher interest rate the accounts carry.

Bottom line

As many consumers plan to spend hundreds or even thousands of dollars on winter holiday shopping, it is wise to make a plan to save money in as many ways as you can. While you may first turn to retailer promotions, discounts and coupons, don’t forget to think about how savings from using credit cards can be added to the mix. And finally, try not to wait until the last minute to start shopping or you’ll run the risk of having to pay extra for expedited shipping and getting stuck with buying super pricey items just so you have a gift to give.