Black Friday is the official kickoff of the peak Christmas holiday shopping season. After the Thanksgiving dinner is completed, you might take a few minutes to plan your shopping excursion to get the best deals. If you are planning to use a credit card to make these purchases, you also have the opportunity to rack up some additional savings with purchase rewards.
In 2015, consumers spent an estimated $67.5 billion for in-store purchases and $2.9 billion was spent on online purchases on Black Friday alone. That boils down to an approximate $403 per shopper. If you plan to spend that much with a credit card that pays 1% cash back, that is $4. Admittedly a few dollars doesn’t exactly sound the most appealing, but, some cash back credit cards like the Chase Freedom or Discover It offer 5% cash back at department stores on the first $1500 in purchases. With a 5% reward rate, that bonus suddenly increases to $20.
If your credit card offers a reward boost for holiday shopping, it can be an easy way to put more money back into your pocket just by choosing to pay with credit instead of debit for instance. Keep in mind that you will probably have to “opt-in” to earn the bonus rewards on purchases and it also pays to read the offer’s terms and conditions. Credit card issuers often classify retail stores like Wal-Mart, Target, or Ross as discount stores instead of department stores and will only earn the base rewards rate. But, you might be able to earn a bonus at online retailers like Amazon.
Even if your credit card doesn’t offer any seasonal bonuses, using a rewards credit card that earns that most valuable recurring purchases reward will also be very beneficial.
Online Shopping Portals
Although Cyber Monday is the Internet version of Black Friday, many retailers also offer online Black Friday specials for those that do not want to fight the crowds in person. The average estimated Black Friday internet purchase in 2015 was $160. Credit card companies like Chase and Discover have an online shopping mall that can allow you to earn additional rewards by first visiting the mall instead of going directly to the retailer’s website. Additional shopping portals are operated by airlines and hotels awarding loyalty points, and, there are a host of cash back apps, not affiliated with a specific credit card company or travel partner, that will pay you cash rewards.
By using a portal, you can earn the regular credit card purchase rewards and any additional advertised rewards offered from the merchant to consumers using the shopping portal.
Enroll in Price Protection
Several of the major credit card issuers offer purchase price protection that will refund you the difference if a retailer drops the price of an item, usually within 60 days after you purchased it. To take advantage of this potential savings opportunity, you have to manually register the purchase on the credit card website. They will monitor a database of prices from the retailers, but, you might also have to keep a close eye on local circulars that the issuer might not receive.
This protection can come in handy if the merchant drops the purchase price even lower than the Black Friday price in the days after Christmas or if the Black Friday price is lower than the purchase you made before Black Friday, to avoid the shopping rush. As with any service, most purchases are eligible but you will need to read the individual policy for any exclusions.
Say “No” to the Extended Warranty
If you are planning to purchase a new flatscreen tv or household appliance, the cashier will ask if you want to spend a few extra dollars to purchase an extended warranty. Sometimes purchasing extended warranties make sense, but, they are also an easy way for a salesman or store to make a few extra dollars. The four major credit cards (Visa, MasterCard, American Express, and Discover) offer differing extended warranty coverage that can potentially overlap the coverage of the same warranty offered by a retailer. If you have time to do your research beforehand, you will have more peace of mind when declining the retail warranty and know that your credit card will cover you if a malfunction does occur.
Apply for a New Credit Card
You might already be pleased with your current credit card portfolio. If not, Black Friday can be a great way to maximize sign-up bonuses that companies use to attract new customers. Whether it is a store charge card offering a steep discount for the first purchase or a traditional credit card with a $3,000 spend minimum to receive the bonus, Black Friday is a perfect shopping opportunity to get the most “bang for the buck” if it is your most expensive shopping day of the year. If you are going to spend the money regardless, you should capitalize on the reward potential.
Do Not Spend Unnecessarily
Each year, there are news reports of consumers spending more than they intended because they were getting a “good deal.” It’s a good deal for the store but not for you if you wake up the next day with buyer’s remorse. By not being intentional of what you want to buy at a discounted price on Black Friday can lead to overspending and erasing any savings from getting up early and braving the crowds.
Pay the Bill On-Time
One final suggestion, don’t forget to pay the bill on-time. Missing a credit card payment is expensive after late fees and interest charges are added to the unpaid balance. It might be even more expensive than overspending and is a financial double-whammy that will for sure wipe out any Black Friday savings and rewards earned.
Author: Jeff Gitlen
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