Credit Card Rewards – Get Paid to Buy Those Gifts

There are only 68 days left until Christmas!! There, I said it. Scary, isn’t it?

Although I absolutely love Christmas, like many of you, I don’t want to think about it in October. But this year, I’m going to try something different. I’m going to shop smarter and apply all of my neat little savings tips to the holiday season as well. This year, I’m starting with a plan – and I’m starting early.

Holiday spending

According to an RBC survey, conducted last year, the average Canadian shopper planned to spend $1,137 over the holidays. Approximately 31% said they would spend less than they had the year before, while 55% said they would keep their holiday spending flat. 18% said they couldn’t afford gifts at all.

The 82% that said they were planning on giving gifts said they planned to spend approximately $100 less than they had in the previous year. RBC’s survey found that, on average, Canadians planned to spend $728 on gifts in 2009. In 2010, that number dropped to $624. Including gifts, decorations, entertainment costs and travel, the average Canadian spent $1,137 last year.

According to Mastercard Canada, shoppers planned to spend between $21 and $50 per person. And believe it or not, it wasn’t the women who were the big spenders.  The survey reports that almost twice as many men (27%) spent over $100 per person on their gift list than women (16%). 27% of older shoppers (those over 50) spent over $100 per person, whereas only 12% of those aged 18-29, and 20% of those aged 30-49 splurged on the $100+ gifts.

Another site estimated that Canadian families planned to spend a whopping $587 just on food.

Rethink holiday spending

When money gets tight, Christmas becomes more stress, less fun. And, to me, Christmas is all about the fun. So I’m thinking that there’s got to be a way to spend more on holiday gifts (or at least the same amount), but still save money. And, lo and behold, there is. Most of the survey sites provide practical tips for saving money, everything from bargain shopping to home-made gifts, and while those ideas are great, they’re not the only answers. I’ve come up with a pretty good one myself.

Introducing: A Cash Back Credit Card

If you use a cash back credit card to make all of your holiday purchases, for example the MBNA Smart Cash Card, you will actually get money back. The 5% you get back (for the first 6 months) on gas will help save on holiday travel costs. You receive an additional 5% back on groceries purchased in the first 6 months as well – so the turkey dinner, bacon and eggs, and the chocolates are all covered!

After the initial 6 months, you get 3% cash back on gas and grocery purchases. Finally, the MBNA Smart Cash Card gives you 1% cash back on all other purchases.

Think of all the money you will get back just making your regular holiday purchases!

Let me break it down for you.

For the $587 you spend on groceries over the holidays, you’ll get $29.35 back.

Add another $6.24 for the 1% you’ll get back on the gifts you’ve purchased (although I’m seriously considering purchasing a few more Loblaws and gas gift certificates this year to cash in on the 5%!).  This means that you’ll receive $35.59 just for spending exactly what you would have spent anyway.

Now consider that these are only the stats for the holiday season. You could be saving hundreds of dollars a year, just by using the right credit card. Check out your savings on using the MBNA cash back calculator.

Related Topics

Credit Card News / Credit Cards

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