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Holiday gifting with credit cards

By Leslie McFadden ·
Thursday, September 30, 2010
Posted: 3 pm ET

With the holidays fast approaching, it's time to start thinking about how you'll pay for all those presents. Luckily, one source of funds may already be in your wallet. Here's a quick tip on using your credit cards to save money on gifts.

If you have cash-back or rewards credit cards, check the rewards summary on your cards. You may have enough to redeem for cash or gift cards, and if so, great. At the very least you'll find out which cards are near the redemption threshold. For instance, yesterday during a review of my credit cards, I saw that I was very close to hitting the point threshold on one of my cards for a $50 store gift card. I was not close at all to qualifying for a rebate on any of my cash-back cards. So what will I do? Focus my spending on that one card so that I can claim the gift card. Then I can either gift the card to a loved one or use it to purchase a present.

I'm not suggesting that you max out your credit card to earn a rebate or a gift card. That said, if you're close to a redemption threshold and can pay your balance in full, concentrating your spending on the card or cards nearest payout can be a money-saving move. Note to those trying to keep their credit score high: using up a large proportion of available credit on a card can temporarily lower your credit rating.

For faster earnings, look online or check with your card issuer about bonus points. For instance, American Express offers triple points on purchases through its Bonus Points Mall and Discover offers a 5 percent to 20 percent cash-back bonus through retailers in its ShopDiscover program.

Have you ever used your reward earnings for holiday gifts?

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