3 credit card rewards tips holiday shoppers should know

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Many credit cards offer some kind of rewards these days, from simple cash back to travel rewards. With family gatherings and gift-giving, the holidays can be a great time to earn a stockpile of credit card points.

You don't have to be a credit card expert to do so (you can leave the travel hacking to the CNBC Points Pro). Understanding the basics of how your card earns rewards and common ways to redeem them can help you maximize them. 

Below, CNBC Select outlines what you need to know about your rewards credit card ahead of shopping this holiday season. 

3 credit card rewards tips for the holidays

• Know your reward type
• Explore your card’s online portal 
• Focus on meaningful rewards

Know your rewards type

One of the first steps to understanding the credit cards in your wallet is knowing the type of rewards they earn — which can help you choose the right card for each gift. These tips can also help you choose a card to apply for.

1. Bonus categories

Many cards offer a base rewards rate of 1X on purchases, but this is typically combined with elevated rewards on specific categories, whether that's groceries, online purchases or gas.

Bonus category cards are often at their best when you consistently spend a larger portion of your income on one of the categories. For example, if you spend a lot on online shopping year-round, not just around the holidays, the Blue Cash Everyday® Card from American Express is a great option. It earns 3% cash back on U.S. online retail purchases on up to $6,000 in spending per year, then 1% back. 

Blue Cash Everyday® Card from American Express

CNBC Select Rating5Learn More

On the American Express site

CNBC Select Rating5Learn More

On the American Express site

Spotlight

Access above average rewards for groceries and gas, plus receive a 0% intro APR for 15 months from account opening on purchases and balance transfers, then 19.74%-28.74% Variable.

Credit scoreRegular APR

19.74%-28.74% Variable

Annual fee

$0

Welcome bonus

You may be eligible for as high as $200 cash back

See rates and fees, terms apply. Read our Blue Cash Everyday® Card from American Express review.

Our expert take

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.

Pros & cons

• 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

More details

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 in the form of Reward Dollars that can be redeemed for a statement credit or at Amazon.com checkout. 
• 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%. 
• Earn 3% cash back at U.S. supermarkets, 3% cash back on U.S. online retail purchases, 3% cash back at U.S. gas stations, on eligible purchases for each category on up to $6,000 per year in purchases (then 1%). Cash back is received in the form of Reward Dollars that can be redeemed as a statement credit and at Amazon.com checkout. 
• Get up to a $7 monthly statement credit after using your enrolled Blue Cash Everyday® Card for a subscription purchase, including a bundle subscription purchase, at DisneyPlus.com, Hulu.com, or Stream.ESPN.com U.S. websites. Subject to auto-renewal. 
• 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

Bonus category cards typically aren't the best fit for someone who spends inconsistently or in small amounts across various categories. And whether or not your holiday spending counts toward a bonus category depends on the merchant category code, or MCC, which is how credit cards classify a specific business. Some credit card issuers have online documentation that shows qualifying purchases per MCC, so you can double-check beforehand.

2. Rotating bonus categories

Some cards have a rotating element to their rewards. Typically, a rotating bonus category card will earn 5% cash back on new categories each month or quarter, up to a specific spending threshold. 

A great example is the Discover it® Cash Back Credit Card. You’ll earn up to 5% cash back within categories that rotate every quarter (as long as you activate), on up to $1,500 in quarterly spending, then 1% back. Popular categories include grocery stores, Amazon, transit and streaming services. 

Remember, you typically have to activate categories each quarter to earn the full 5% cash back. So, if you plan on using a rotating bonus category card for gift purchases, log in to your online account and activate before you start swiping.

Discover it® Cash Back

Learn MoreLearn MoreCredit scoreRegular APR

18.74% - 28.74% (Variable)

Annual fee

$0

Welcome bonus

Earn Unlimited Cashback Match™ + $200

Terms apply.

More details

Highlights

Highlights shown here are provided by the issuer and have not been reviewed by CNBC Select's editorial staff.

• Get a 0% intro APR for 15 months on purchases and balance transfers; balance transfer fee applies. Then 18.74% - 28.74% Standard Variable Purchase APR applies, based on credit worthiness
• INTRO OFFER: Receive a $200 statement credit when you spend $500 on purchases in your first 3 months of account opening
• UNLIMITED CASHBACK MATCH: Discover will automatically match all the cash back you've earned at the end of your first year! There's no minimum spending or maximum rewards. You could turn $150 cash back into $300. Click "Apply Now" to view important rates and disclosures
• Earn 5% cash back on everyday purchases at different places you shop each quarter like grocery stores, restaurants, gas stations, and more, up to the quarterly maximum when you activate. Plus, earn unlimited 1% cash back on all other purchases
• Redeem cash back for any amount. No annual fee
• Terms and conditions apply

Balance Transaction Fee

3% for the first 15 months; 5% at a promotional APR that Capital One may offer to you at any other time

3. Flat-rate rewards

If you're not interested in playing category roulette, a simple, flat-rate cash-back card is likely your best option. These cards offer a consistent rate of cash back, typically 1.5% or 2%, on every purchase — meaning you won't have to track categories to get the best rate.

The no-annual-fee Citi Double Cash® Card made our list of the best 2% cash-back credit cards, earning 1% back when you make a purchase and another 1% when you pay your bill. That means you can earn 2% back on everything from a Lego set for your nephew to a brand-new laptop for your teen.

Citi Double Cash® Card

CNBC Select Rating5.0Learn More

On Citi's site

CNBC Select Rating5.0Learn More

On Citi's site

Spotlight

Receive an intro APR for 18 months on balance transfers and earn at least 2% cash back on every purchase.

Credit scoreRegular APR

18.49% - 28.74% variable

Annual fee

$0

Welcome bonus

Earn $200 cash back

See rates and fees, terms apply.

Read our Citi Double Cash® Card review.

Our expert take

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.

Pros & cons

• 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

More details

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

3%

Explore your card’s online portal

Many major credit card issuers, like Chase, Amex and Capital One, offer their own online portals where you can use your rewards and manage credit card perks. 

Credit card portals are most commonly used to redeem rewards, whether it's securing a statement credit, booking travel or transferring points to hotel and airline partners. 

When it comes to travel — perhaps you're looking into booking a trip as a gift for a loved one — Bilt has one of the most valuable point currencies on the market. The value of Bilt Points mainly lies in its transfer partners, of which it has 25+. You can move Bilt Points to other mainstream hotels or airlines and potentially book cheaper travel.

Some credit card portals offer exclusive deals that you can activate in advance, typically ranging from 5% to 10% off, or the cash equivalent. For example, several Chase cards, like the Chase Sapphire Preferred® Card (see rates and fees), have access to Chase Offers, a program that offers brand-specific discounts. Simply activate the offer and earn rewards on related spending.

Chase Sapphire Preferred® Card

CNBC Select Rating5.0Learn More

On Chase's site

CNBC Select Rating5.0Learn More

On Chase's site

Spotlight

With Points Boost, your rewards will be worth up to 1.5X on thousands of top-booked hotels and flights from select airlines through Chase Travel^_SM.

Credit scoreRegular APR

19.49% - 27.74% Variable

Annual fee

$95

Welcome bonus

Earn 75,000 bonus points

See rates and fees. Terms apply. Member FDIC.

Read our Chase Sapphire Preferred® Card review.

Our expert take

The Chase Sapphire Preferred® Card packs a punch for a $95 annual fee card, offering annual travel credits, comprehensive travel protections, flexible rewards and more.

Pros & cons

• You can transfer rewards to all of Chase's travel partners including World of Hyatt, Southwest Rapid Rewards and many more
• Long list of travel and shopping protections
• Annual Chase Travel hotel credit

• Has an annual fee
• Requires a high credit score

More details

Highlights

Highlights shown here are provided by the issuer and have not been reviewed by CNBC Select's editorial staff.

• Earn 75,000 bonus points after you spend $5,000 on purchases in the first 3 months from account opening.
• Enjoy benefits such as 5x on travel purchased through Chase Travel_^SM, 3x on dining, 3x on vacation homes at top brands, 3x on gas & EV charging, 3x on top streaming services and online groceries (excluding Walmart, Target, and wholesale clubs), 2x on all other travel purchases, 1x on all other purchases.
• Earn up to $100 in statement credits each account anniversary year for hotel stays through Chase Travel^_SM.
• Count on Trip Cancellation/Interruption Insurance, Auto Rental Coverage, Emergency Evacuation and Transportation, and more.
• Get a year of complimentary Apple TV when activated by December 31, 2026 - a value of $180.
• Complimentary DashPass membership, a $120 value for 12 months. Enjoy $0 delivery fees and reduced service fees on eligible DoorDash orders, plus exclusive Chase savings on grocery, everyday essentials, and more. Activate by 12/31/29.
• Receive one statement credit of up to $120 every four years as reimbursement for the application fee charged to your card for a Global Entry, TSA Precheck® or NEXUS application.
• Transfer points to leading airline and hotel loyalty programs.
• Member FDIC

Balance transfer fee

Either $5 or 5% of the amount of each transfer, whichever is greater

At the time of writing, a few targeted Chase Offers include 20% cash back with Sony Electronics and 10% back on Pandora Jewelry. Before you make any purchases, it's worth checking your online account for any offers and activating them.

Focus on meaningful rewards

Don't apply for a new card around the holidays just because it earns 1% more in a category you plan to spend in. Realistically, that small percentage likely won't amount to much throughout the whole year.

For example, if you compare earning 2% on groceries vs. earning 3% over the course of a year, the difference is pretty negligible. Spending $5,000 a year on groceries at a 2% cash-back rate would earn you $100 in rewards, compared to $150 back at a 3% cash-back rate — or a $50 difference. 

The real value comes when you earn a large multiplier in categories where you were previously earning just 1%. If you can jump from that to 5% with a rotating bonus category card, for example, that could be significant.

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