Many people redeem their credit card rewards as soon as they earn them—but a few people save their rewards for one special season. Beth McCarter, parent of two and founder of homeschooling resource Teachable Stem, uses her credit card rewards to help her family have a very happy holiday.
“This year we earned 100,000 Capital One miles,” McCarter told us. “We spent all of those miles in the past month.”
This isn’t an unusual year for McCarter and her husband—in fact, they’ve earned around six figures’ worth of Capital One miles nearly every year since applying for the Capital One Venture Rewards Credit Card. This year, their Capital One rewards not only offset the costs of holiday gifts, but also enabled McCarter to book a solo trip to Mexico. “I have taken a solo trip every year since 2018, always or partially funded with points.”
So how does McCarter fund her holidays with credit card rewards? And can you do the same thing? We asked McCarter to share her story, and added our own expert advice to help you earn the rewards you need to have the holiday you want.
How I got started with credit
McCarter is extremely skilled at earning and redeeming credit card rewards—even though she didn’t get her first credit card until she was 28 years old.
“I got the Capital One Venture Rewards card in 2018,” she told us. “Before that, I was afraid of credit.”
McCarter chose the Venture card, which offers 5X miles on hotels and rental cars booked through Capital One Travel and unlimited 2X miles on all other purchases, after hearing a friend rave about the rewards. “The benefits seemed amazing. The Capital One card offered the extra oomph we needed as a low-income family to reap rewards on money we were already spending.”
Even though McCarter had never opened a credit card under her own name, she had already built up a credit score by becoming an authorized user on one of her husband’s credit cards. This gave her the positive credit history she needed to be approved for one of the best travel credit cards currently on the market—and the opportunity to earn enough rewards to fund not only that year’s holiday spending, but also every year to follow.
Become an authorized user
If you’re thinking about taking out a top rewards credit card to help with the holidays, it’s a good idea to get your credit score as high as possible before applying. If you don’t have a credit history of your own yet, becoming an authorized user on someone else’s credit card can help you build credit quickly.
Becoming an authorized user on another person’s credit card often means that when the card issuer reports to the three credit bureaus (Equifax, Experian and TransUnion) it will update the card’s balances and payment history on your credit report as well as on the account holder’s. (It’s important to check with the issuer to confirm that it reports data for authorized users.) This gives you the opportunity to piggyback off someone else’s good credit while simultaneously building your own.
How I use a travel credit card to fund the holidays
How does McCarter regularly earn 100,000 or more Capital One miles every year? And how does she use those miles to cover the cost of her holiday purchases, while still having enough rewards left to book a solo trip?
“We put all of our spending on the Venture,” McCarter told us. “Before we got our mortgage we put our rent on it.”
Putting all of your spending on your highest-earning credit card is one way to maximize your credit card rewards—but if you really want to get the most out of your rewards credit card, you have to know how to redeem your rewards as well. In McCarter’s case, it’s all about setting a holiday budget and offsetting the costs with miles.
“I spent $500 on gifts using miles,” she told us. “It doesn’t directly correlate because you can only erase travel expenses, but the way we budget is we erase stuff that we can and use that money for gifts.” The Capital One Venture card allows you to redeem your miles by using the Capital One Purchase Eraser to erase travel expenses—so the McCarters keep their budget balanced by erasing every travel expense the family makes during the year and earmarking the money saved for holiday gifts.
What did McCarter do with the miles left over? “I used my Capital One Venture card to purchase $300 tickets to Mexico on Southwest.” When you book travel through Capital One’s travel portal, you have the opportunity to redeem Capital One miles for all or part of your purchase. This is how McCarter is able to give her family a happy holiday—and give herself a much-needed vacation!
Choose the right rewards card
If you want to use credit card rewards to offset the cost of your holidays, it’s important to choose the right rewards card. If you’re planning on traveling over the holidays, a travel rewards card might be the way to go. If you’re spending the holidays at home, you might want to take advantage of a credit card that rewards online shopping or a one that rewards grocery purchases.
Not sure what your holiday budget is going to look like? Look for an everyday spending card that offers flexible reward redemptions, giving you the opportunity to redeem your rewards for statement credits, gift cards, online shopping, travel bookings, charitable donations and more.
How I avoid credit card debt
“We try to pay off our cards every single month. We had a gap in employment because of the pandemic, so we have interest payments for the next month or two—but generally, we’re very successful at paying off our balances in full.” Luckily, she and her husband are already used to the kind of budgeting that will keep their credit card purchases from turning into credit card debt.
How does McCarter keep from overspending on credit? She sticks to her budget—and doesn’t allow herself to think of her credit cards as tools that let her buy now and pay later. “If you’re like us and you’re on a fixed income, make sure that you don’t use your credit cards like extra spending money,” McCarter advises. “Use it to pay off bills and budgeted expenses.”
McCarter and her husband have used this strategy to enjoy many rewarding holidays using their Capital One Venture Rewards card. Confident in their debt management approach, they recently decided to add another top rewards card to their household.
“We opened a Discover it® Miles card because it had a really good welcome offer,” McCarter told us, as well as an attractive 0 percent introductory APR on purchases and balance transfers for 15 months (followed by 12.74 percent to 23.74 percent variable APR).
Like the Capital One Venture Rewards card, the Discover it Miles Credit Card is a flat-rate travel rewards card. McCarter and her husband will earn an unlimited 1.5 miles on every purchase, and Discover will match all the miles they earn during their first year as cardholders.
Stick to a budget
There are a lot of good reasons to create a household budget, whether you’re trying to save money, plan your purchases in advance or avoid the kind of overspending that can lead to debt. However, not many people realize that sticking to a budget can also improve your credit score. Since 35 percent of your FICO credit score is based on payment history and 30 percent is based on credit utilization, you can boost your credit considerably by spending within your means, keeping your balances low and making every payment on time.
Want proof? McCarter’s credit score is currently in the upper 700s, which is considered “Very Good” under the FICO credit scoring model. Her husband, who is an authorized user on her Capital One and Discover credit cards, has a credit score in the upper 700s as well.
The bottom line
Want to fund your holidays with credit card rewards? Choose a card that offers high rewards on the purchases you make most often—and then redeem those rewards for travel, gifts and more.
“Credit card points are a reward for paying off your bills every month and sticking to your budget,” says McCarter. “Use your credit card points for fun stuff, like nice gifts for your family. I don’t have any financial guilt for spending my credit card rewards on holiday gifts and trips. It’s a bonus, and it’s really special for me.”