by Lyle Daly | Oct. 10, 2020
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Holiday shopping will probably drive your spending up, so why not get a bonus out of it?
The holiday season is an exciting time, but it also tends to be the time of year when consumers spend the most money. Those gifts, parties, and travel can add up quickly.
One proven approach to keep your spending in check is to make a holiday budget. But you can also take advantage of your extra seasonal expenses if you use them to qualify for a sign-up bonus on a new credit card.
It's a simple way to get value back from your holiday expenses. Here's why there's no time like the present to start working toward a sign-up bonus.
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Most credit card sign-up bonuses require you to spend a certain amount of money within a specific timeframe. For example, a cash back card could pay $250 when you spend $1,000 in three months or a travel card might offer 80,000 points when you spend $4,000 in that same time limit.
All you need to do is hit a spending minimum, and the holidays are the perfect time of year to do it. Apply for the credit card with the bonus you want, and then use that card for all your holiday purchases. Since you'll be spending more, you could even qualify for bigger sign-up bonuses with greater spending requirements.
The typical time period for bonus spending is three months. If you get a card with that kind of offer now, you'd be able to use it on your purchases for Halloween, Black Friday, and Christmas. All that spending would go toward the bonus offer.
Even if it's a bonus that requires a higher spending minimum in a longer time period, you can still use your holiday expenses to get a jump start on it.
Several credit card companies have recently launched new, limited-time bonus offers on their most popular credit cards. Here are a few examples of bonuses launched in September alone:
These new bonuses are a big improvement on the previous offers available from each of those credit cards. They're also limited-time deals, though, which means it's best to apply quickly if you're interested.
While sign-up bonuses can get you fantastic value from your regular spending, they also carry the risk of overspending. It's easy to make unnecessary purchases and justify them because they contribute toward a sign-up bonus. There's even more danger of this during the holidays, when there's already so much temptation to spend more.
The key, as we touched on earlier, is to set up a holiday budget. Ideally, you should prepare one before you pick a credit card. That way, you can add the expenses you projected in your holiday budget to your regular expenses and see approximately how much you'll spend. Then, you can choose a credit card with a spending requirement you can reach based on that amount.
This will likely also help you keep your holiday costs down. Last year, Americans with a holiday budget saved over $300 compared to those without one.
With so many valuable sign-up bonuses available right now and the holidays on the horizon, it's a smart time to apply for a new credit card. Whether you go for cash back or travel rewards, you'll turn money you're already spending into a nice bonus to start the new year.
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