5 Tips to Maximize Your Black Friday Credit Card Rewards

[Update: Some offers mentioned below have expired. You can view the current offers from our partners here — Discover it Chrome and Chase Freedom. Disclosure: Cards from our partners are mentioned below.]

Black Friday has become such a strong tradition, that children growing up today might even wonder if the Pilgrims celebrated it after the first Thanksgiving. Each year, retailers open their stores earlier, and offer even more tempting “door busters.” At the same time, shoppers are becoming even more savvy and sophisticated when it comes to maximizing their savings.

In fact, Discover Financial Services surveyed Americans about their plans, and found that seven in 10 Americans plan to shop on Black Friday and Cyber Monday and that these shoppers planned on spending an average of $1,014 this holiday season, a 20% increase from 2012. According to Brian Meier, director of rewards marketing at Discover, “The survey also found men to be particularly bullish about shopping, as their spending intentions have gone up by 15 percentage points since 2010, while women’s spending intentions have gone up by 12 percentage points since 2010.”

Because Black Friday shoppers are most likely making their purchases with credit cards, it makes sense to examine how they can use their cards most wisely on this popular shopping day. Here are some tips.

1. Take stock of your rewards cards.

A lot of Americans have multiple rewards credit cards, but if you want to save the most money on Black Friday, you have to use the right one. This means finding the card in your wallet that will deliver the most cash back, points or miles for purchases at the stores where you will be shopping. This can be tricky if you have a card that offers bonus categories of spending that change each quarter.

For example, Citi’s Dividend Platinum Select offers 5% cash back this quarter at toy stores, department stores and Best Buy stores. The Chase Freedom card features 5% cash back this quarter at select department stores and at Amazon.com, while the Discover It card features 5% back for all online shopping. With each of these cards, customers must take the time to log in and register for these bonuses. Thankfully, registration can occur any time before the end of the year in order to receive a bonus on eligible purchases.

2. Watch out for limits on rewards.

Many reward credits offer generous rewards, but limit it at a certain amount of spending each quarter or each year. For example, the 5% cash-back bonuses on the Chase Freedom and Discover It cards are only valid on a cardholder’s first $1,500 of spending each quarter, while the Citi Dividend Platinum Select card limits 5% cash-back bonuses to $6,000 of spending in a calendar year. After those limits are reached, all purchases earn only 1% cash back.

3. Avoid paying interest.

Black Friday is all about saving money, but those who carry a balance on their credit card will have trouble realizing any benefit once interest charges are added. Those who pay off their cards every month should figure out ahead of time exactly how much they can afford to spend on Black Friday (and Cyber Monday) and stick to that limit.

On the other hand, shoppers who carry a balance should limit their spending as much as possible in order to pay down the credit cards sooner. It’s hard to pass up a good sale, but these shoppers need to keep in mind that they will immediately incur interest on every dollar spent. And when interest charges are considered, Black Friday sales become a lot less attractive.

4. Research store cards ahead of time.

One of the reasons that Black Friday sales can be so generous is that retailers are counting on making profits off of other products, such as their store credit cards. The card that are offered at the checkout counter sometimes feature poor terms, high interest rates and negligible rewards. On the other hand, some store cards are still worth applying for, the trick is to know which ones.

Since the checkout counter on Black Friday is not the best place to research the terms and conditions of the cards you are being offered, take the time to do your homework before you venture out. Once you know which stores you will visit, look up the terms and conditions of their store cards online and decide if these products make sense for you.

5. Don’t get too caught up.

The most important piece of advice for credit card users is not to get overwhelmed by the hype on Black Friday. Credit cards are more secure than other methods of payment and quite convenient, plus we don’t normally see the bill for a few weeks. Therefore, it can too be easy to rationalize a questionable purchase. Try to remember that 70% off of an unnecessary purchase is still a waste of money.

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