The best ways to earn and use cash back for your holiday shopping
Holiday shopping can be a big expense, so it’s worth finding ways to get rewarded.
In fact, many people are seeking out rewards this holiday season: 67% said that they’re more likely to shop with a retailer that offers rewards or cash back, according to data from a survey of over 2,000 Americans by PayPal and Morning Consult.
Getting and using cash back can be one way to make the holiday season less strenuous on your budget. Luckily, there are several ways to earn cash back, including credit cards and shopping portals.
But equally important is using those rewards efficiently. Some modes of redeeming cash back and credit card rewards are more valuable than others. Here are the strategies and tools you should know about ahead of the holiday shopping season.
Cash back tips for holiday shopping
How to earn cash back on your holiday purchases
If you want to earn cash back on your holiday purchases, there are a few simple ways you can do it.
Use the right credit card
One of the best ways to get cash back is through a credit card. This method is relatively simple: In most instances, you pay with the card, and then earn a percentage of your spending as cash back. Typically, you can redeem this money a few ways, including as a statement credit or as cash.
But not all cash back credit cards are equal. You may earn cash back in different ways.
If you’re willing to put in some extra work to maximize your cash back potential, it could make sense to opt for a card that has rotating spending categories.
The Chase Freedom Flex® is one of these cards. You’ll earn 5% cash back after activation on up to the first $1,500 spent in combined purchases each quarter (then 1%), and the categories rotate every three months.
The Chase Freedom Flex® is an excellent cash-back card with generous rotating quarterly categories. In additional the rewards, you also can take advantage of the intro APRs for purchases and balance transfer for more than a year.
- Long intro APR for purchases and balance transfers
- Rewarding quarterly bonus categories
- No annual fee
- Bonus categories are capped each quarter
- Has a foreign transaction fee
Rewards
- 5% cash back on up to $1,500 in combined purchases in bonus categories each quarter you activate (then 1%)
- 5% cash back on travel booked through Chase Travel℠
- 3% on drugstore purchases and on dining (including takeout and eligible delivery services)
- 1% cash back on all other purchases
Balance transfer fee
Intro fee of either $5 or 3% of the amount of each transfer, whichever is greater, on transfers made within 60 days of account opening. After that, either $5 or 5% of the amount of each transfer, whichever is greater.
Foreign transaction fee
Additionally, the Chase Freedom Unlimited® (see rates and fees) earns 1.5% cash back on all purchases, with a 3% back offer at drugstores and dining purchases, including takeout and eligible delivery.
The Chase Freedom Unlimited® is a no-annual-fee card that earns generous cash-back on everyday purchases and a lucrative welcome bonus. Plus, if you pair it with a premium Chase credit card that allows point transfers, you can convert your cash back into flexible travel rewards.
- Users get a high rewards rate and strong welcome bonus
- Purchases and balance transfers receive an intro APR
- No annual fee
- Has a foreign transaction fee
- Few rewarding ongoing benefits
Highlights
Highlights shown here are provided by the issuer and have not been reviewed by CNBC Select’s editorial staff.
- Earn a $200 Bonus after you spend $500 on purchases in your first 3 months from account opening
- Enjoy 5% cash back on travel purchased through Chase TravelSM, our premier rewards program that lets you redeem rewards for cash back, travel, gift cards and more; 3% cash back on drugstore purchases and dining at restaurants, including takeout and eligible delivery service, and 1.5% on all other purchases.
- No minimum to redeem for cash back. You can use points to redeem for cash through an account statement credit or an electronic deposit into an eligible Chase account located in the United States!
- Enjoy 0% Intro APR for 15 months from account opening on purchases and balance transfers, then a variable APR of 18.49% – 27.99%.
- No annual fee – You won’t have to pay an annual fee for all the great features that come with your Freedom Unlimited® card
- Keep tabs on your credit health, Chase Credit Journey helps you monitor your credit with free access to your latest score, alerts, and more.
- Member FDIC
Balance transfer fee
Intro fee of either $5 or 3% of the amount of each transfer, whichever is greater, in the first 60 days. After that, either $5 or 5% of the amount of each transfer, whichever is greater.
Foreign transaction fee
3% of each transaction in U.S. dollars
If you’re looking for a low-maintenance option, however, there are cash back cards that earn flat-rate rewards. The Citi Double Cash® Card is a good example of this: You’ll earn 1% cash back when you make a purchase and 1% when you pay your bill.
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.
- Balance transfers get a long intro APR
- Generous flat-rate cash-back rewards structure
- Earns transferable rewards
- No annual fee
- It has a foreign transaction fee
- Intro APR only applies to balance transfer
- Points transfer ratios are reduced compared to premium cards
Highlights
Highlights shown here are provided by the issuer and have not been reviewed by CNBC Select’s editorial staff.
- Earn $200 cash back after you spend $1,500 on purchases in the first 6 months of account opening. This bonus offer will be fulfilled as 20,000 ThankYou® Points, which can be redeemed for $200 cash back.
- Earn 2% on every purchase with unlimited 1% cash back when you buy, plus an additional 1% as you pay for those purchases. To earn cash back, pay at least the minimum due on time. Plus, earn 5% total cash back on hotel, car rentals and attractions booked with Citi Travel.
- Balance Transfer Only Offer: 0% intro APR on Balance Transfers for 18 months. After that, the variable APR will be 18.49% – 28.74%, based on your creditworthiness.
- Balance Transfers do not earn cash back. Intro APR does not apply to purchases.
- If you transfer a balance, interest will be charged on your purchases unless you pay your entire balance (including balance transfers) by the due date each month.
- There is an intro balance transfer fee of 3% of each transfer (minimum $5) completed within the first 4 months of account opening. After that, your fee will be 5% of each transfer (minimum $5).
Balance transfer 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.
Foreign transaction fee
Use a cash back shopping portal
There are an array of shopping portals that can help you earn extra cash back on top of your credit card rewards just by using them. Several banks and credit card programs have their own shopping portals (which we touch on further below).
In fact, there are so many options out there that there are even tools to help you optimize which one has the best rewards rate for you. Cashback Monitor and Savewise both offer this capability.
But Rakuten is a standout among cash-back and shopping portals for a few reasons. Its wide net is one of them: the portal has connections with over 3,500 stores.
Rakuten
Information about Rakuten has been collected independently by CNBC Select and has not been reviewed or provided by the company prior to publication.
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Cost
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Cash back
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Coupon codes
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Mobile app
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Works with in-store purchases
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Welcome bonus
New users can earn a $10 bonus after spending $25 on purchases made in your first 90 days. You also may be able to earn an even larger bonus if you’re referred by a friend.
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How to redeem your savings
Rewards are issued quarterly.
Pros
- You can earn American Express Membership Rewards Points or Bilt Rewards instead of cash back
- New users can earn a welcome bonus or referral bonus
- Offers at over 3,500 online stores
- You can activate savings, then shop and save on in-store purchases
Cons
- Cash back is awarded quarterly
- Typically not valid with Amazon purchases
While the rewards can be valuable on their own, you can also transfer them to other rewards programs, like American Express Membership Rewards or Bilt. And, unlike credit card shopping portals which require you to use that card to earn, Rakuten lets you use any card you’d like.
You’ll want to read the terms and conditions of each store — some stores only allow cash back on certain types of items — but it could be a good way to start earning cash back while you shop.
Stack your credit card and portal rewards
You can — and should — get both credit card rewards and shopping portal rewards at the same time.
Since you can pay with a variety of credit and debit cards on Rakuten, including rewards and cash-back cards, it’s possible to double-dip and maximize your cash back. This could mean that your cash-back earnings could add up more quickly.
While it might take a few extra steps, using both a rewards credit card and a shopping portal could help make your purchases much more rewarding, especially when you know you’ll be spending a chunk of change.
Even if the amount you earn is small, it could help you create some extra room in your budget in 2027.
How to redeem cash back on your holiday purchases
Now that you’ve done the hard work of earning your cash back, here comes the fun part: spending it. Here are four additional ways to redeem credit card rewards that can help you save money now, not later.
Cash back or direct deposit
One of the easiest ways to redeem your rewards is for cash back or a direct deposit — especially if you also have a bank account with your card issuer.
Some banks, like Chase, only let you directly deposit your rewards into a qualifying Chase account. Others, like Citi, are much more flexible and allow you to deposit rewards into any verified checking or savings account.
If you have a card that earns cash back instead of points or miles, it’s even easier. You’ll always know exactly how much your rewards are worth, which is typically 1 cent per point. Credit card points and miles can change in value depending on how they’re used.
Statement credits
Applying your rewards as a statement credit serves a similar purpose to cash back or direct deposit, except you’re covering a purchase you already made. Many credit cards let you apply your earned rewards to your current statement balance to lower it. Just be aware that some companies, like American Express, don’t count this toward a required minimum payment.
You might prefer this option as you can see your bill lowering in real time and free up more space on your credit limit.
Gift cards
Redeeming your credit card rewards for gift cards can help you save on future costs, whether you’re looking to spend them yourself or hand them out as gifts during the holidays.
You can easily browse available gift cards with your credit card’s rewards portal. Some issuers let you choose a specific amount. For example, Chase offers a handful of gift card options within its portal — ranging from Best Buy to Macy’s. For a Starbucks gift card, you can select any amount between $15 and $200 — so if you wanted to get your cousin a gift card for $23.78, you could.
Some issuers offer discounts when you use rewards to purchase gift cards, usually in the ballpark of 10%. Instead of paying 5,000 points for a $50 gift card, you might only need 4,500.
Credit card shopping portals
Spending within a credit card online shopping portal can help you earn additional rewards and allow you to use rewards for purchases.
Chase has one of the most robust online credit card shopping portals. The Shops at Chase offers products from Cuisinart kitchen appliances to a new iPhone. You can use a combination of points and credit to cover your purchases.
Some issuers partner with companies and allow you to pay with rewards at checkout. For example, select American Express credit cards, including the Blue Cash Everyday® Card from American Express, let you redeem Rewards Dollars at Amazon.com checkout.
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.
- Up to $264 in streaming service and meal kit credits every year (subject to auto renewal)
- High cash-back rates in popular spending categories
- No annual fee
- The best bonus cash-back categories are capped
- Has a foreign transaction fee
Highlights
Highlights shown here are provided by the issuer and have not been reviewed by CNBC Select’s editorial staff.
- Apply and find out your welcome offer. As High As $200 cash back after you spend $2,000 in purchases on your new Card within the first 6 months of Card Membership. Welcome offers vary and you may not be eligible for an offer. Apply, and if approved: 1. Find out your offer amount 2. Accept the Card with your offer 3. Spend $2,000 in 6 months 4. Receive the cash back. Cash Back is received as Reward Dollars that can be redeemed for a statement credit or for other select options.
- No Annual Fee.
- Enjoy 0% intro APR on purchases and balance transfers for 15 months from the date of account opening. After that, your APR will be a variable APR of 19.74%-28.74%.
- Plan It® makes it easy to split up large purchases into equal monthly payments with a fixed fee, plus you still earn rewards the way you usually do! Here’s how: Select a purchase of $100 or more in your online account or the American Express® App. Choose from up to 3 plan duration options. Review and confirm.
- Earn 3% Cash Back on Groceries at U.S. supermarkets, on up to $6,000 per year in purchases (then 1%). 3% Cash Back on U.S. Online Retail purchases, on up to $6,000 per year in purchases (then 1%) 3% Cash Back on Gas at U.S. gas stations, on up to $6,000 per year in purchases (then 1%) Cash back is received as Reward Dollars that can be redeemed for a statement credit or for other select options.
- With the $84 Disney Streaming Credit, you can earn up to $7 back per month as a statement credit when you use your enrolled Blue Cash Everyday® Card from American Express Card to purchase a subscription, including a bundle subscription, on DisneyPlus.com, Hulu.com, or Stream.ESPN.com U.S. websites, with no minimum purchase requirement. Subscription is subject to auto-renewal.
- Apply with confidence. Know if you’re approved for a Card with no impact to your credit score. If you’re approved and you choose to accept this Card, your credit score may be impacted.
- Terms Apply.
- See Rates & Fees
Balance transfer fee
Either $5 or 3% of the amount of each transfer, whichever is greater.
Foreign transaction fee
2.7% of each transaction after conversion to US dollars
Many issuers, including Capital One, also partner with digital payment platforms like PayPal, which means you can use rewards at the millions of partnered PayPal stores.
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For rates and fees of the Blue Cash Everyday® Card from American Express, click here.
Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.
