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Make the Most of Your Holiday Shopping

You know you’re going to spend money this holiday season. For most of us, it’s one of life’s inevitabilities. Just because you know you are going to spend, though, doesn’t mean that you can’t make the most of the holiday shopping season.

If you are smart about your shopping, and if you are careful about what you buy — and how you go about buying it — you can actually reap some benefits from holiday spending:

Make a List

My very favorite thing to do when planned spending is involved is to make a list. Planning is a huge deal. If you want to avoid impulse spending, a list is vital. Plus, you can make sure that you don’t forget anything important as you complete your shopping.

Create a list of what you need to buy this holiday season [3]. List out those you are buying gifts for, as well as what you plan to purchase for them. Also, include a list of food you want to buy, decorations you will get, and other planned purchases.

Your list will help guide you through the holiday shopping season, ensuring that you only get what you need, and that you don’t neglect something.

Pull Out Your Best Rewards Credit Card

Next, pull out your best rewards credit card. Figure out which is the best credit card [4] for you this holiday season. Think about which card offers the best cash back bonus. Also, look at rotating categories, and holiday bonus rewards. In some cases, it can make sense to use two or three different cards, depending on what you’re buying, and which offers the best reward for that particular spending category.

In other cases, especially if you don’t want the hassle of deciding which credit card to use, it makes sense to just pick one card. In any cases, carefully consider your options. Pull out the most generous rewards card and then putting all of your spending on that card. Pay for all of your holiday purchases using your rewards card, and watch your rewards pile up quickly.

Pay Off Your Balance Before You Owe Interest

Of course, racking up the rewards points does very little good if their value is offset by interest. Make sure that you pay off your credit card balance before the interest kicks in. This can be done if you have left your money sitting in your bank account the entire holiday season. You haven’t used that money, so it is available to pay off your credit card before you have to pay interest.

You can even improve the situation a little bit by keeping your cash in an interest bearing account. It sits there, earning money on your behalf, until it is needed to pay off your credit card balance. You earn a little extra, and you have piled up the rewards, either giving you cash back, or additional points that can be redeemed for travel or merchandise.

While the value of your rewards probably won’t result in completely offsetting your holiday spending, you can reduce the net effects. At the very least, you can get some of what you spent back. Combine your credit card shopping with a rebate program like Ebates [5], and you can do even better.

(Photo: meyeralan [6])