This Two-Minute Strategy Can Help You Save Money on Everything You Buy

woman with smartphone and credit card
Carmen Mandato/ The Penny Hoarder
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These past few weeks, a number of statistics have revealed we spend way too much money during the holidays.

I mean, these studies didn’t state that explicitly, per se, but it was definitely  implied. After all, the average consumer is expected to spend $967.13 this year. Then there’s the fact that 22% of us will spend a whole paycheck on holiday expenses.

And these numbers aren’t solely based on gift-giving. Also consider travel, hosting duties, decorations and meals.

To help alleviate this financial stress, we’ve already rounded up the ways to make an extra $200 before Christmas. Then we’ve got this step-by-step budgeting plan.

But what we haven’t highlighted enough? One simple, passive way to earn guaranteed cash back on all your purchases all year-round: a rewards credit card.

How a Rewards Credit Card Can Save Christmas (and 2018)

Credit cards aren’t for everyone. We’ve told countless stories of folks who have buried themselves in credit card debt, resulting in years of digging themselves out.

And we get it. Credit cards are risky; they signify debt to many people. But if you use them responsibly and pay them off each month, you can reap the rewards.

The rewards are more than just points and dollars — though those are nice, too. Some cards offer price protection services, extended warranties, car-rental insurance and trip-cancellation insurance.

How to Choose the Best Rewards Credit Card

Surprisingly, this is a highly personal subject. Not in an All American Rejects “Dirty Little Secret” kind of way, but more in a way that’s truly going to depend on the individual and his or her spending habits.

The best card will depend on which stores you frequent as well as what form you want your rewards in. WIll you take cash? Gift cards? Airline miles?

With so many cards offering the “best of the best,” it’s easy to get lost.

We’ll start you off with one recommendation: the Chase Freedom Unlimited card. Its claim to fame? You’ll earn an unlimited 1.5% cash back on all your purchases. Plus, if you spend $500 in your first three months of opening the card (hi, groceries), you’ll pocket a $150 bonus.

There’s no annual fee, and the cash-back rewards don’t expire. We checked Credible’s annual rewards calculator, and it estimates $417 in annual rewards based on our spending habits.* (You can enter your unique spending habits and see what you’d earn, too.)

Now that you’ve got one option to consider, it’s time to compare other cards. You can start old-school, and comb through various online guides — like this Lifehacker one. It’ll give you a good idea of what to look for.

And think about this: Use your rewards credit card in the new year, and by December 2018, you just might have enough to pay for next year’s holiday expenses.

(We’re trying to be positive about this whole “we’re spending way too much” thing, OK?!)

*Annual Rewards amounts will change based on the amounts you enter. The monthly spending category names and definitions may vary among issuers, and categories may not align one-to-one.

The information for the Chase Freedom Unlimited card has been collected independently by The Penny Hoarder. Opinions expressed here are the author’s alone, not those of the credit card issuer, and have not been reviewed, approved or otherwise endorsed by the credit card issuer. The Penny Hoarder is a partner of Credible.

Carson Kohler (@CarsonKohler) is a junior writer at The Penny Hoarder. She shops with her Chase Sapphire Preferred card, which is what Birch recommended.