There’s no denying Costco offers pretty solid deals on some things—and amid the pandemic and a nationwide spike in new COVID-19 cases, there’s certainly never been a better time to bulk buy. However, if you don’t have a membership, the store’s $60+ per year membership requirement might feel like a huge deterrent,…Read more...
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Credit card points can save you money on holiday shopping, but you could be better off saving your rewards instead
Summary List PlacementThis page includes information about the Discover it® Cash Back, Discover it® Student Cash...Summary List PlacementThis page includes information about the Discover it® Cash Back, Discover it® Student Cash Back product, which is currently not available on Business Insider and may be out of date. If you have a stash of credit card rewards, you have various options for redeeming them to save money on holiday shopping. Many of the top rewards credit cards let you cash in points for statement credits, merchandise, gift cards, and more. However, if you have enough money to cover your planned expenses, now is the perfect time to sign up for a new rewards credit card. Using a new card for end-of-year expenses can help you earn a large welcome bonus of points, miles, or cash back. See Business Insider's list of the best credit cards for holiday shopping » The holidays might look different this year due to the pandemic, but the shopping season and its many sales will likely continue as usual — albeit online rather than in person, in many cases. More than ever, many of us will be looking for ways to save on gifts and other purchases during this notoriously expensive season. If you have a stash of credit card rewards, you could redeem some of them to offset purchases, from gift cards to getting cash back as a statement credit. But is it better to use your credit card rewards now, or save them for travel down the line? Should you use points for holiday shopping? Should you really be using your rewards to cover your holiday shopping bill? That's really up to you, but there's certainly nothing wrong with this strategy. A lot of people save up their cash back or travel points for a splurge they really want — or for a luxurious trip when they're ready to travel — but if you'd like help covering holiday bills, it could absolutely make sense to redeem them to lower your out-of-pocket costs. On the other hand, if you aren't worried about cash flow, now could be the perfect time to open a new card to earn rewards you can use later on — especially now that so many cards are offering elevated welcome offers. If you have some points racked up on a rewards credit card and you haven't used them yet, here are some of the smartest ways to use points for holiday gifts and other spending this year. The best ways to use points to save on holiday expenses Use statement credits and cash back to cover purchases First off, keep in mind that most rewards and cash-back cards let you redeem your points for statement credits or a check in the mail. You can use either option to pay for holiday gifts, or to cover the cost of holiday parties and other end-of year expenses. Using rewards for statement credits or cash back may or may not be a good value depending on the type of rewards credit card you have. Cash-back credit cards tend to offer 1 cent per point in value for this option, which is solid if not spectacular, but the same may not be true with other flexible rewards or flexible travel points. When you redeem American Express Membership Rewards points for statement credits, for example, you'll only get 0.6 cents for each point you redeem. Redeem rewards for gift cards You can also cash in all kinds of different points for various gift cards, whether you have a Discover credit card like the Discover it® Cash Back or another cash-back card like the Chase Freedom Flex℠ or the Capital One® Quicksilver® Cash Rewards Credit Card. Generally speaking, you'll get 1 cent per point when you cash in rewards for gift cards, but this can depend on the rewards credit card you have. You can also redeem Chase Ultimate Rewards, American Express Membership Rewards points, and Citi ThankYou Rewards points for gift cards, so make sure to check all of your options. Chase Ultimate Rewards tends to have the broadest selection of options including gift cards for GrubHub, Wayfair, Sephora, Lowe's, and more. And when there's having a sale, you can frequently find gift cards for 10% off or more. Also remember that you could use gift cards to purchase holiday gifts, but you could also give gift cards as gifts themselves. Cash in points for merchandise If you have flexible rewards points with a program like Chase Ultimate Rewards, Citi ThankYou Rewards, or American Express Membership Rewards, don't forget that you can cash in your points for merchandise from retailers you would probably shop with anyway. With Chase Ultimate Rewards, for example, you can use points to shop in the Apple Store or on Amazon.com. Points redeemed for merchandise through Chase Ultimate Rewards are worth 1 cent each, so keep this in mind if you have a card like the Chase Sapphire Preferred® Card, the newly updated Chase Freedom Unlimited®, or the brand-new Chase Freedom Flex℠. You can also use flexible points from the Citi ThankYou program to shop with retailers like 1-800 Flowers, Amazon.com, and Best Buy. Eligible cardholders can also use their points to shop with PayPal with millions of retailers around the world. If you have a card that earns American Express Membership Rewards points, you can "pay with points at checkout" with retailers like Walmart.com, Amazon.com, Best Buy, PayPal, and more. Just keep in mind that you'll only get around 0.7 cents per point in value if you redeem Amex points for shopping. Chase Freedom Flex℠ Earn a big sign-up bonus to defray holiday costs If you want to earn points as you shop for the holidays but also save money in the end, consider signing up for a rewards credit card that lets you score a big welcome bonus you can redeem after the fact. The new Chase Freedom Flex℠ is an excellent option for this strategy, since you can earn a $200 Bonus after you spend $500 on purchases in your first 3 months from account opening, and you can also earn 5% cash back on up to $1,500 in quarterly bonus categories after activation (then 1%), 5% back on travel booked through Chase, 3% back on dining and drugstores and 1% back on other purchases. By spending $500 on holiday shopping with your new card, you could earn the welcome bonus and rewards on your spending, then use your points for statement credits to your account. The Freedom Flex card also gives you 0% APR on purchases for 15 months, followed by a variable APR of 14.99% – 23.74%. This means you could pay off your holiday purchases for 15 months without any interest, leading to more potential savings. Our best credit card offers and deals page can tell you about all the other sign-up bonuses you could be earning right now. There's no 'right' way to use your points If you're planning to spend money on holiday gifts or splurges for yourself this year, it's smart to take stock of your credit card rewards to see how they can help you. You may be able to cash in points for gifts you couldn't otherwise afford, or for gift cards you can give or use to buy gifts your family and friends will love. However, it could make more sense to sign up for a new credit card and use it for holiday purchases so you can earn a big welcome bonus. If you start working toward the minimum spending requirement now, you could even parlay the points or cash back you earn more into gifts for loved ones on your list. Just remember that, when it comes to using a credit card for rewards, it's crucial to pay off your balance each month and avoid interest at all costs. At the end of the day, you'll only end up "ahead" with rewards if you stay out of debt. Related Product Module: Related Product Credit CardsRelated Content Module: More Credit Card CoverageJoin the conversation about this story »
I pay $60 a year for a Costco membership for just me and my husband, and I'm convinced it's still worth it for 4 reasons
When I tell people I shop at bulk retailer Costco, they're usually confused because my household...When I tell people I shop at bulk retailer Costco, they're usually confused because my household only has two people: me and my husband. But I like to go every two or three weeks and load up on groceries for a better price than my local store, I use Costco to book our travel, and I can't get enough of the free snacks. For our family, paying $60 a year for a Costco membership saves us more in the long run, even though we're only two people. Read more personal finance coverage. I was thrilled when a brand new Costco opened up about 10 minutes from my house. Some people didn't quite understand my excitement. They would say things like, "Why do you need a Costco membership? It's just you and your husband!" they'd tell me. Or they'd ask, "Are you planning on having five children and buying everything in bulk?" The truth is that even though Costco is a bulk retailer and you have to join to shop there, I believe a membership is worth it for smaller families like my own. At least, it is for me. The cost of Costco membership Costco offers three different membership options: Gold Star Membership: The Gold Star is $60 per year and comes with two membership cards. Gold Star Executive Membership: With the Gold Star Executive, you get two cards plus 2% rewards on all purchases for $120 per year. Business Membership: There's also a Business option that offers the same benefits as the Gold Star and Gold Executive memberships, but allows members to add additional people for $60 each. I went with the Gold Star membership because it has everything I need: the freedom to shop at Costco whenever my heart desires and a membership card for me as well as one for my husband. If you're wondering whether my $60 yearly membership is worth it, I'm here to tell you: absolutely! Here's why: 1. I get access to lower prices than I see anywhere else When I compare the prices of some of the foods I get at Costco to the prices of similar foods at my local grocery store, Giant Eagle, I know I'm getting a great deal. For example, Costco's blend of frozen veggies is $0.28/100 g instead of the $0.45/100 g at my grocery store. Not to mention, Costco's blend has broccoli and cauliflower, two veggies that I love and are not found in the grocery store version. Also, Costco's organic, cage-free large eggs are $6.39 for two dozen, or $0.26 per egg. The same eggs at my grocery store are available for $5.85 for 18 eggs, or $0.32 per egg. Since my husband and I go through eggs quickly, Costco eggs are a big money-saver. In addition, wild Alaskan salmon at Costco is $32.99 for 3 pounds, which equates to $11 per pound or $0.69 per ounce. Similar salmon at my grocery store is $12.99 for 12 ounces or $1.08 per ounce. Salmon is one of our go-to dinners, so I always buy it from Costco. 2. I make fewer trips to the store Since Costco allows me to buy in bulk, I grocery shop a lot less than I used to. This is a big deal for someone like me who is self-employed as my time is literally money. I try to stock up for at least two to three weeks' worth of meat (I love the chicken and lamb!), eggs, frozen fruit and veggies, snack foods, and household products like paper towels and toilet paper. 3. I get to snack on the free samples This may sound crazy, but I love to head on over to Costco if I'm craving a little snack. The store is packed with delicious free samples that not only fill me up but inspire me to try new foods that I don't typically eat. Fortunately, I have pretty good self control and rarely buy the foods that are being promoted. 4. I regularly use Costco's vacation deals Believe it or not, I also use Costco to book my vacations and save big. I used to use American Express Travel but found that Costco prices are better. In April, my husband and I went to an all-inclusive resort in Cancun and paid $1,775 a person for seven nights through Costco. This price included everything: flights, airport transfers, and all-inclusive lodging. When we checked American Express, it was $1,950 a person for the same package. We spent the $350 we saved on a dolphin excursion and had the time of our lives. While Costco may not be the right option for every family, it makes complete sense for mine. I know I've saved much more than the $60 a year it cost me to join. More personal finance coverage What's the best airline credit card? The best cash back credit cards Are CDs a good investment? When to save money in high-yield savings Best rewards credit cards Join the conversation about this story » NOW WATCH: Super-Earths are real and they could be an even better place to live than Earth