6 ways to maximize your credit card in summertime


Summer is the season of road trips, vacations, pool parties, barbecues, and, of course, back-to-school shopping.

Summer adventures don't come cheap, though. According to a 2017 Tangerine survey, 74 per cent of Canadians say they're spending more than $1,000 on summertime trips.

Additionally, 59 per cent admit they typically overspend on their vacation budgets, and 29 per cent say they're using credit to fund a vacation they'll pay for later.

"The summer is expensive, but it's also one of the most popular times to use perks and rewards," says Laurie Campbell, CEO of Credit Canada Debt Solutions.

"Double-check before spending to see if you can use your card as a tool to save you money first," says Stephanie Petsinis, a Toronto-based debt counsellor with the Credit Counselling Society. "It can be done for all sorts of purchases in the summer."

Here's how your credit card can be more than just a payment tool over the summer.

1. Redeem your points for free travel ...
If you have a rewards card, chances are you've been accumulating points. Those points can be cashed out for your trip.

Families can save hundreds, if not thousands, of dollars by trading in their Air Miles, Aeroplan points, RBC Avion, Marriott Rewards and other points for free accommodations, airfare and other transportation.

"Some credit cards have multiple categories and opportunities to redeem," Campbell says. "Others are more restrictive."

For example, some cards have blackout dates for flights or hotel stays. Be flexible with dates, layovers and time of day for your travel to snag the best offers with points.

"Do your homework to see if you can plan fun holidays around your cards' parameters," she says.

Just now getting into the rewards game? "Apply for a card that you can use in many scenarios from hotels to air travel to even all-inclusive vacations," Campbell says.

2. ... Or on free summertime necessities and activities.
If you're "staycationing," travel points still can come in handy. All the points you've collected could be redeemed for barbecues, tickets to a baseball game or a visit to the zoo.

Be sure to carefully crunch the numbers, Petsinis says. Figure out what's giving you the most for your points. For instance, exchanging points for airfare may come with hefty taxes, while a night at the movies may come with no strings attached.

Also, consider what might actually take a load off your summer spending. If you already have a trip to a ballgame planned, it may make the most sense to redeem your points for it, rather than something else.

3. Take advantage of summertime promotions.
Your credit card issuer often will offer seasonal promotions in the summer, Petsinis says. These might include deals for the lowest rates for car rentals at preferred companies, or maybe a special for up to 20 times more points for gas and groceries if you shop at specific stores.

Back-to-school is another time when card issuers partner with retailers to offer bonus points or cash back on purchases via their shopping portals or other promotions.

"Buy when the bonuses are offered up to double up on rewards," Campbell says.

4. Take advantage of car, trip and medical insurance ...
Before paying for travel insurance ahead of your trip, check on the travel coverage offered with your credit card.

Your credit card insurance could cover cancelled travel due to weather or medical emergencies, a trip to a doctor in another country or even rental car problems.

"This could save you at least $150 or more for basic trip cancellation insurance to travel medical insurance," Petsinis says.

5. ... And extended warranties.
You could be purchasing a barbecue or air conditioning unit in July, then picking up a laptop for your university-bound child in August. Make sure you're making these purchases with your credit card, Petsinis says.

Your card may offer you an extended warranty - in most cases an extra year beyond the manufacturer's warranty.

There is a caveat with using credit for big purchases, Petsinis says. Don't swipe your card unless you have the funds to pay off those big-ticket items in full. Otherwise, you're tacking additional interest onto the final price.

6. Build up your rewards points or make use of cash back.
If you're charging summer trips or back-to-school purchases, you're earning rewards.

With cash back cards, the benefit may seem small, but it adds up, and that cash back softens the blow of summer spending.

With travel rewards cards, each purchase adds points to your account.

"Use your card where you can for groceries, toiletries, and any item you know you need to purchase. That way you are building up points on things you would buy anyway," Campbell says.

Summer is an expensive time, but it doesn't have to mean you're buried in debt when the leaves start to change. Use your card wisely, and your summer months can be fun and less costly.

See related: Mid-year financial checkup: A look at your budget and goals, Points redemption 101, 4 non-travel rewards for your travel rewards card
Published July 24, 2017

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