We're all looking for ways to save, but what if you could also get some rewards for all those gifts or travel plans you're making? Credit card rewards sound like a great deal, offering points, miles, or even cash back for your purchases, but they can easily become a problem.
"It could be a good deal if you use it smartly," said Ted Rossman of Bankrate. "It could also be a ticket to overspending."
Rossman says as soon as you fall behind on your credit card payments, those rewards just aren't worth it.
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"You'd have to pay in full and you have to avoid interest for these to be worth it," said Rossman.
Rossman says only about half of people who use credit cards make their payments on time and keep their balance low. So how can you make sure your cards are working for you?
If you have a rotating cash back card, many of them will lean into holiday shopping. See what kind of retailers they offer bonuses with and shop there. If you can choose a category for extra cash back or rewards, Rossman suggests picking online shopping.
It can also be helpful to make a list of what you plan to buy and where you can get it, to try and maximize your rewards. If you don't have a card with holiday bonuses, Rossman still has some tips.
“Look for store coupons and maybe you go through one of those shopping portals like Rakuten or shop through Chase or a lot of airlines have these portals," said Rossman. "Its affiliate marketing, but you get a kickback in the form of added rewards.”
And if you shop in-store, you might be asked to open a store card in exchange for a discount. Rossman says if you have a really big order it might be worth it, but make sure you understand the terms of the credit card before you sign up.
"I recently did some research and found about 20 store cards that charge 29.99 percent interest," said Rossman. "That's an absolutely brutal interest rate."
Remember, if you can't afford it, be careful of using a credit card to get it.
"Credit cards are like power tools," said Rossman. "They can be really useful, or they can be dangerous."
Another reason to use credit cards when shopping online are the protections against scams. Some cards can also give you purchase protections depending on what you buy, so make sure you know all the perks associated with your credit card.
