Summer holiday sales: Card reward tips to maximize savings
Want to take advantage of Memorial Day sales? Start by choosing the right credit card
Making complex credit topics simple
As retailers roll out summer deals, you’ll need to decide whether to pay with cash, debit, a cash back or rewards credit card, or choose any promotions offered, which may be limited to their store cards.
“There’s an ongoing debate about whether consumers should hold regular credit cards or store credit cards,” says Natasha Rachel Smith, retail expert at TopCashback.com, an online cash back and coupon site. “While signing up for a retail credit card to save more money is tempting, you should be aware of the pitfalls before you commit.”
Before you hit the summer holiday sales, consider these tips and strategies to maximize savings without incurring card debt.
See related: Store credit cards: 6 ways to stay out of trouble
Tips to take advantage of summer sales
- Think twice before leveraging store card offers: Study the pros and cons before signing up.
- Consider cash back cards first: 0 percent introductory offers abound.
Think twice before leveraging store card discounts for summer sales
“Store credit cards are often best when you take advantage of the initial sign-up offer,” says Liran Amrany, founder and CEO of Debitize, a personal finance app that turns any credit card into a debit card.
The Macy’s American Express® card, for instance, offers a 20 percent discount on purchases made within the first two days after activating your account. You can save up to $100 total when you spend $500.
That’s a decent amount of savings, but Amrany says generous initial discounts are best reserved for larger purchases. How useful a store card discount is for summer holiday sales depends on what you plan to buy.
In addition, some store cards may even force you to choose which benefits you enjoy upon opening the card. The Lowe’s Consumer credit card, for instance, gives you the option of earning 5 percent back or taking advantage of special promotional financing on a purchase.
Consider cash back cards first
Smith says shoppers must also be wary of overspending with a store card discount.
“If you’re not a disciplined shopper, you might end up spending more than you anticipated with a store card because of the discount,” she says.
Any discount you’ve initially earned by spending more can get wiped out by interest charges if you don’t pay the balance in full. The average retail credit card carries an APR of 24.99 percent, with store-only cards averaging 26.38 percent, according to a 2017 CreditCards.com survey.
So, unless you’re getting a steep discount by using the store’s card, a regular cash back card could give you better savings overall.
- The Chase Freedom and Chase Freedom Unlimited cards, for instance, both offer an introductory cash rewards bonus of $150 when you spend $500 in the first three months after account opening. Both cards also offer a 0 percent introductory APR on purchases and balance transfers for the first 15 months.
Look for specific deals on each holiday sale
- Around Memorial Day you’ll be able to get good deals on appliances and furniture.
- Labor Day is typically a good time to find grills, laptops and clothes on sale.
- Around Father’s Day, you’ll see more sales on tools and electronics.
- Pre-Labor Day sales in August are great for snagging savings on lawnmowers.
- When checking the calendar for the best time to buy certain items, remember to also check your budget.
Take advantage of coupons, electronic rebates and other online tools
Another great reason to consider rewards and cash back cards over store cards is your savings stacking potential.
- Sites such as RetailMeNot and Coupon Sherpa offer printable coupons and promo codes you can use to save at hundreds of stores, so you’re not limited to using a store card to get a discount.
- Generate additional cash back earnings through Ibotta, Ebates and TopCashBack when you shop with your rewards card.
- SnipSnap lets you search for and apply retail coupons from your mobile device.
- Shopkick allows you to earn rewards when you shop, then redeem them for gift cards to popular retail brands.
- Store-specific savings apps can also come in handy when you’re shopping summer holiday sales. Target’s Cartwheel app, for example, displays coupons and deals you can activate before you check out.
Stack savings using card-linked offers
Smith says a cash back rewards card that has revolving bonus categories or card-linked offers can be a better choice for saving on summer spending. “More often than not, you’ll receive double to triple the amount of rewards for spending with the featured merchant.”
- If you have a Discover card, for example, you can shop Discover Deals for savings. Some of the ongoing deals available through the summer include 15 percent off purchases of $100 or more at Kohl’s and a 5 percent cashback bonus at Sam’s Club.
- Your rewards card’s online shopping portal can also yield discounts on seasonal sales.
- If you have an American Express card that earns Membership Rewards points, such as the American Express Everyday® card, you can shop brands such as Sony, Apple and Best Buy with fewer points. Deals are updated regularly.
Compare all options
If you’re set on shopping over the Memorial Day weekend, check what’s in your wallet first. Opening a store card may be a waste of time if you’ve already got a solid rewards card, or if there’s a better rewards card out there you can apply for.
"Do some research and figure out which paying option gives you the biggest discount,” says Smith.
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