Hacks to save money while shopping for holidays this year

Today we’re launching a new series: Money Made Easy, where we focus on easy ways to manage your finances and save money. CNBC Select Contributor and Financial Advisor Kristin Merrick shares with us her top tips and tricks for saving when shopping this holiday season.

Check out the full interview featured on TODAY in the video below, and read on to see some of Merrick’s top tips.

Create a strategy for your purchases

It goes without saying that a budget will be a key part of your holiday shopping strategy, as it can help you determine how much money you can comfortably spend on gifts and other items.

“I like a strategy or a game plan, like a good old-fashioned checklist,” Merrick says. “Who are you buying gifts for? What else are you doing this season? Hosting a party, hosting? Put everything on a list and assign actual dollar amounts [to each]. Add it all up and if it’s too much money, we have to start cutting things.”

Keeping a budget in mind will prevent you from overspending on unexpected expenses, as each purchase can add up faster than you think.

Have a payment plan

It’s also a good idea to determine the best method of payment for items before holiday shopping. Shoppers have roughly four main payment options: cash, debit cards, credit cards, or buy now-pay later. Each option comes with its own set of pros and cons.

“One of the hacks I’m recommending this year is using old-fashioned cash,” says Merrick. Specifically, she recommends using the “cash-in-the-envelope method” to simultaneously budget your money and have a way to pay.

Plus, once your cash envelope is empty, you’ll know you’ve maxed out your budget. As Merrick said, when you’re out of money, you’re out of money.

Credit cards are a very popular way to pay for items throughout the year, as many offer a variety of rewards and offers. However, using credit cards for holiday shopping can be especially powerful, as you’ll make purchases you had to make anyway and earn rewards for doing so.

“My recommendation for credit cards is always the same, which is that you should only use your credit card if you are a responsible credit card holder who can pay it off in full each month, because it is how you can profit from your credit cards.”

There are credit cards that offer perks like retailer discounts, travel credits, return protection, purchase protection, cash back, and points.

According to Merrick, a good cash back credit card can earn you between 2% and 6% cash back on your purchases. Typically, cash back can be redeemed as a statement credit, which you can then use to make a payment on your credit card bill.

Select rated the Chase Freedom Unlimited® Card as the best cash back credit card because it has no annual fee and cardholders earn 5% cash back on travel purchased through Chase Ultimate Rewards®, 3% on pharmacies and restaurant meals (including take-out) and 1.5% on all other purchases. The Chase Freedom Flex℠ card is another solid choice since the welcome bonus allows new cardholders to earn $200 cash back after spending $500 on purchases within the first three months of account opening.

Hunt Unlimited Freedom®

  • Awards

    Enjoy 5% cash back on travel purchased through Chase Ultimate Rewards®, our premier rewards program that lets you redeem rewards for cash back, travel, gift cards and more; 3% cash back on drugstore purchases and restaurant meals, including eligible takeout and delivery services, and 1.5% on all other purchases

  • welcome bonus

    Earn an extra 1.5% on everything you buy (up to $20,000 spent in the first year) – worth up to $300 in cash back. That’s 6.5% on travel purchased through Chase Ultimate Rewards®, 4.5% on restaurants and drugstores, and 3% on all other purchases.

  • Annual subscription

  • Introduction AVR

    0% for the first 15 months from account opening on purchases and balance transfers

  • Regular APR

  • Balance Transfer Fee

    Introductory fee of $5 or 3% of each transfer amount, whichever is greater, on transfers made within 60 days of account opening. After that, either $5 or 5% of each transfer amount, whichever is greater.

  • Foreign transaction fees

  • Credit needed

Chase Freedom Flex℠

  • Awards

    5% cash back on up to $1,500 in combined purchases in bonus categories each quarter you activate (then 1%), 5% cash back on travel booked through Chase Ultimate Rewards®, 3% on pharmacy purchases and meals (including eligible takeout and delivery services), 1% cash back on all other purchases

  • welcome bonus

    $200 cash back after spending $500 on purchases within the first three months of account opening

  • Annual subscription

  • Introduction AVR

    0% for the first 15 months from account opening on purchases and balance transfers

  • Regular APR

  • Balance Transfer Fee

    Introductory fee of $5 or 3% of each transfer amount, whichever is greater, on transfers made within 60 days of account opening. After that, either $5 or 5% of each transfer amount, whichever is greater.

  • Foreign transaction fees

  • Credit needed

Credit cards that offer a 0% APR introductory period are great for holiday shopping since you have a certain amount of time to pay off the balance without having to pay interest. Just make sure you make at least the minimum payments on time or you could lose that 0% introductory interest rate. Select some of the best 0% APR cards below:

Wells Fargo Reflect® Card

On the Wells Fargo secure site

  • Awards

  • welcome bonus

  • Annual subscription

  • Introduction AVR

    0% intro APR for 18 months from account opening on eligible purchases and balance transfers. Intro APR 3 month extension with on-time minimum payments during the intro period. 16.74% to 28.74% variable APR thereafter; balance transfers made within 120 days are eligible for the introductory rate and 3% fee, then a BT fee of up to 5%, min $5.

  • Regular APR

    16.74% – 28.74% Variable APR on purchases and balance transfers

  • Balance Transfer Fee

    3% introductory fee for 120 days from account opening, then up to 5% ($5 minimum)

  • Foreign transaction fees

  • Credit needed

U.S. Bank Visa® Platinum Card

On the secure site of US Bank

  • Awards

  • welcome bonus

  • Annual subscription

  • Introduction AVR

    0% for the first 18 billing cycles on balance transfers and purchases

  • Regular APR

    18.24% – 28.24% (Variable)

  • Balance Transfer Fee

    Either 3% of the amount of each transfer or $5 minimum, whichever is greater

  • Foreign transaction fees

  • Credit needed

To avoid accidentally making a late or missed payment, take a set it and forget approach by setting up automatic payment so you don’t have to remember to make a payment manually.

Finally, Buy-Now-Pay-Later (BNPL) platforms can also be a tool used by buyers to manage their spending. Essentially, when buyers make a purchase, they can divide the total into a number of smaller, equal fixed payments on a certain schedule. This is meant to make it more affordable. However, keep in mind that you are borrowing money that you will eventually have to repay in full. Be aware that some BNPL platforms may charge interest or late payment fees, so be sure to read the terms before agreeing to use the service.

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At the end of the line

The financial component can make holiday shopping even more stressful, but shoppers can take a few important steps to prepare for the overcharge without breaking the bank. Merrick recommends creating a strategy for what you’re shopping for, then setting a budget. She also suggests ways to use cash, credit cards and BNPL platforms to shop responsibly this season.

Of course buyers should remember to be careful when using payment methods like credit card or BNPL platforms because they are spending money they may not have and all must be repaid over time.

Editorial note: Any opinions, analyses, criticisms or recommendations expressed in this article are those of Select’s editorial staff only and have not been reviewed, endorsed or otherwise endorsed by any third party.

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