Racked Up Lots of Credit Card Rewards From Holiday Shopping? 3 Options to Look At

The holidays tend to be an expensive period of the year. We can thank the numerous sales that tend to occur during that time as a big reason, and also, the seemingly never-ending pressure to spend on gifts, travel, and decor.

Many consumers spend more from late November through mid- to late December than they do the rest of the year. And if you use your credit cards to make purchases, you may now be sitting on more reward points than you're used to having. If so, here are a few ways you can make the most of them.

1. Cash out your rewards to pad your savings

Could your savings use a boost? If you don't have enough money in the bank to cover at least three months of essential bills, then the answer is probably yes. And in that case, it could pay to redeem your credit card rewards for cash and use that money to pad your savings account. That way, if an unexpected bill arises in the future, you may find it easier to cover.

2. Use your rewards to pay off a large credit card balance

To accrue more credit card rewards, you have to spend more money. It's that simple. If you're worried about paying off your holiday purchases, you can look into redeeming your rewards for a statement credit that reduces your current balance. That could make it much easier to tackle.

3. Treat yourself to something special

Maybe you're sitting on a whopping credit card balance as a result of your holiday shopping, only you saved up for the holidays in advance and are able to cover that bill without stress. And maybe your savings are also in great shape -- you have enough money to cover multiple months of bills with extra left over for different goals. 

If that's the case, there's really nothing wrong with using your credit card rewards to treat yourself to something nice. That could mean redeeming your rewards for a gift card to one of your favorite retail shops. Or, it could mean getting cash out of those rewards and spending it on an enjoyable outing with friends. 

A silver lining during an expensive time of the year

A lot of people get stressed about the extra spending they feel compelled to do during the holidays, and understandably so. If you're now staring at a credit card balance that's higher than usual, you're no doubt in good company, and you may not be thrilled about it. But the silver lining is that you might at least have a generous amount of reward points to tap. 

At the same time, though, recognize that it's never a good idea to spend extra on your credit cards for the express purpose of racking up rewards. In the course of chasing rewards, you might easily end up racking up something a lot less desirable -- credit card debt. And that's the sort of thing it pays to avoid at all costs, no matter the time of the year.