5 cardholders share how they earn and redeem rewards around the holidays

Some will travel to exotic destinations on points, others are using cash back to give away outstanding holiday gifts

Erica Sandberg
Personal Finance Writer
Consumer finance expert, author and “Opening Credits” columnist.

Best ways to redeem rewards points over the holidays

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A deep pool of credit card rewards can be a godsend during the winter holidays.

In addition to your normal expenses, odds are you’ll have far more to cover. According to a PwC report, American consumers projected they would spend an average of $1,250 in 2018 on combined gifts, travel and entertainment

Using rewards credit cards for the winter holidays is not just wise, it’s common, says Dani Cushion, chief marketing officer for Cardlytics, a company that runs loyalty programs for banks.

“Rewards are used throughout the year, but there is a massive spike during the holidays,” says Cushion. “Everyone wants to save money and using them to pay for things at this time of the year just makes sense. It’s money not coming out of your pocket.”

Here is what five savvy cardholders will be doing with the rewards they’ve built up this holiday season, and the accounts they used to their financial advantage. If you haven’t yet adopted such a method, you may be inspired to rip a page from their playbook for 2019.

See related: Last-minute holiday travel: Dos, don'ts, rewards card tips

1. For tropical travel

“I am always saving up our miles,” says Dana Howard Freeman, who lives in Burlington, Vermont. “It is ongoing. I put everything on our credit cards in order to maximize earning points. This means the electric bill, the cable bill, the cellphone bill, etc. Why would I pay them with a check when I can put them on my credit card and earn points?”

Freeman and her husband wield a couple of rewards cards, one of which is the Chase Sapphire Reserve. With it they received 50,000 bonus points after meeting the $4,000 minimum spend within the first three months, and it came with a $300 annual travel credit, which brought the $450 annual fee down to $150.

“We earn 3 times the points on travel worldwide [immediately after earning the travel credit] and triple points on dining at restaurants,” says Freeman, who also redeems the points via the Chase Ultimate Rewards shopping portal, since it offers discounts on things she wants.

Starting at the beginning of the year, the couple charged and repaid their bills, earning enough points for a six-night vacation at the Prince Waikiki hotel in Honolulu over Christmas and New Year's Eve, with upgraded airline seats.

“Travel is the single most important thing to me,” says Freeman. “My husband and I stopped giving each other material gifts years ago. Instead we give each other the gift of experience by traveling together. It's so much more meaningful.”

See related: Using credit cards for everything has risks, rewards

2. To see the other San Francisco

Dr. Cacinda Maloney is an adventure and travel writer who manages multiple credit cards to finance her family’s holiday excursions.

Since she lives in Phoenix, Arizona, an American Airlines hub, two of her credit cards are affiliated with the airline: a Citi AAdvantage Platinum Select World Elite Mastercard and a Barclay Aviator AAdvantage Silver Mastercard.

In addition, she has a Platinum Card® from American Express and The Starwood Preferred Guest® Credit Card from American Express (now part of the Marriott Rewards program).

By charging assertively with her many accounts in the months before Christmas, Maloney has been able to take her family of four to exotic destinations with the points. This year it will be San Francisco, Mexico, and the rewards she’s earned will cover each person’s flights.

“I am constantly saving points, but around the holidays it’s a great time to start accumulating then for the future Christmas trip,” says Maloney. “We own two businesses and so everything goes through the cards first, before we pay the card off at the end of the month.”

See related: How to transfer rewards points to airlines

"I am constantly saving points, but around the holidays it's a great time to start accumulating them for the future Christmas trip. We own two businesses and so everything goes through the cards first."

3. For gifts and a beach-y getaway

Lynda Thorn is a Northern California-based travel consultant and writer who, along with her husband, starts concentrating on their Costco Anywhere Visa Card by Citi and Southwest Rapids Rewards Plus Credit Card for the winter holidays many months in advance.

“We are always buying stuff at Costco, and I fly Southwest more than any other airlines,” she explains. “The Costco Visa does not have an annual fee, so it was a no-brainer.”

Racking up rewards is easy for the Thorns. Since they fly Southwest during the year, they earn 2 points for each $1 spent on the airline. “I use my Southwest Rewards card to make all my purchases and pay most of our bills with it,” she says.

Meanwhile, her husband uses the Costco card for household needs, earning cash all the way. This card gives up to 4 percent back on gas (for the first $7,000 per year and then 1 percent thereafter), 3 percent on restaurant and travel, 2 percent on Costco purchases and 1 percent on general purchases.

“I’m all about a bargain!” says Thorn. “I love shopping at thrift stores, and buying things on sale. This is just taking it to the next level. There’s nothing like using your points to book an airline ticket.”

This year, they’ve racked up enough points for their airline tickets to Cancun, Mexico, and the cash will be used for Christmas presents.

See related: How to stack rewards to save big on purchases

4. To fill the space under the tree

Steve Grant is vice president of operations for a Tampa, Florida, technology company who uses rewards credit cards to offset the high cost of his family’s holiday gifts.

Chief among Grant’s accounts is the Discover it® Cash Back card, which gives him 5 percent cash back when he charges with it during specific quarterly spending categories on up to $1,500 in purchases following activation each quarter

“I begin in January and save up my points until November and December,” says Grant. “Depending on what the credit card company is offering at that time I can determine the most efficient way to redeem them. Then I begin shopping for my holiday presents.”

Grant stays attuned to the deals offered on his card company’s shopping portals, and if it meshes well with his gifting ideas, he buys them at the discount. Any remaining cash back goes to delete his December credit card balance.

“It alleviates a large amount of holiday budgeting which can add unneeded stress to my favorite time of year,” says Grant. “It sometimes allows me to get better gifts than I might strictly coming out of my pocket.”

"Using my points for trips is fantastic! I love that I can do a few extra days at a more luxury property and fly business-class at the cost of an economy priced vacation!"

5. To be Bora Bora bound

“I save my rewards points up for the holidays,” says Heather Ashley, a New York City-based publicist. “I’m still planning on where we will go for Christmas and New Year's this year, but I think it will be Bora Bora. Using my points for trips is fantastic! I love that I can do a few extra days at a more luxury property and fly business-class at the cost of an economy priced vacation!”

Ashley has several accounts, but concentrates on her Chase IHG Rewards Club Premier Credit Card, which she opened in 2006. To date, she has amassed over half a million points with the card, and has taken many vacations with the points she’s earned.

“IHG has a thing called ‘PointBreaks,’” says Ashley. “Hotels that are 40,000 points can sometimes be 20,000 points. You have to be aware of when the deals are but it’s a great program. I keep an eye out for their promotions. I use my credit cards for everything, but of course I always pay them off every month. If you are paying interest then you are basically canceling out the value of the points!”

The spring charger gets the winter rewards

According to consumer finance expert Andrea Woroch, anyone can make a major dent in their holiday expenses by using credit cards proactively. If you can’t start in January, give it a solid push in the spring.

“It begins with choosing the right rewards card for you,” says Woroch. “One or two cards is usually good, such as a travel card if you tend to go out of town for the holidays and a cash back card for gifts and other items.”

Woroch recommends drawing up a holiday budget at the start of the new year, though, because the total you spent will be fresh in your mind. Then use that figure as a guide.

Monitor any extras the card issuers are giving, too. “Sign up for the promotional emails,” says Woroch. “That way you can charge the most when the reward structure is the highest. By the time next December rolls around, you’ll be ready to spend without any stress, debt or budget damage.”


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Updated: 12-10-2018