These are the 5 ways I'm using credit card rewards to pay for every single holiday gift I buy this year

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  • To save money, there are ways to use credit card rewards to pay for holiday gifts instead of spending cash.
  • Some retailers, like Amazon, allow you to redeem points directly at checkout, but usually at a lower value than other redemptions.
  • It's also possible to use rewards from certain credit cards to buy gift cards or erase purchases you've already made.
  • Another option is to give the gift of travel by sharing your frequent flyer miles. Some airlines, like JetBlue, allow you to pool points with family for free.
  • Read Business Insider's guide to the best credit cards for holiday shopping.

I've become very careful with how I spend my cash these days. With so many changes and loss of income this year due to the pandemic, I'm trying to hold onto my money more than ever.

With the holiday season approaching, and my gift-giving list getting bigger (family members who had babies in 2020 and friends who now have partners), I've been super stressed over how to afford presents for the people who mean a lot to me.

Recently, I was eyeballing my growing stockpile of credit card points — I didn't use any on travel this year and spent more money on my credit card than usual (especially at the start of the pandemic when I panic-bought household goods and food). I wondered if I could challenge myself to use them for holiday gifts, and discovered a strategy that would allow me to fully keep my hands off my cash.

I'm using points from two of my credit cards: the Capital One® Spark® Miles for Business and the JetBlue Card. Here's how I'll be able to use credit card rewards to pay for every single holiday gift this year. 

Redeem credit card rewards at retailers directly 

Because I'm trying to avoid in-person holiday shopping this year, I plan to make a lot of online purchases. With my Capital One® Spark® Miles for Business, I noticed that certain online retailers, like Amazon, allow you to use credit card rewards at checkout instead of cash.

One of the first gifts I bought was a Kindle that was listed for $90 plus tax, but I used around 1,300 Capital One miles to pay for it and kept the cash in my wallet instead. I plan to buy around 30% of my gifts this way and have budgeted about 10% of my overall credit card points to use for these purchases.

Miles from the Capital One® Spark® Miles for Business are only worth 0.8 cents each when you use them this way (or for gift cards), compared to 1 cent apiece when you redeem them for travel — but this is a good option if you're staying close to home.

Buy gift cards with points, then turn them into presents 

Many credit cards offer the option to buy gift cards with rewards points. Rather than buying individual gift cards as gifts, I redeemed 12,500 Capital One Spark miles to get a $100 department store gift card, which I'll use to buy at least three gifts.

This way, I'm able to buy items I know my friends and families will like, without spending any cash.

Redeem miles for store gift cards 

Because I do have a handful of loved ones who prefer getting gift cards and picking out items for themselves, I allotted an additional 12,500 Capital One miles to spend on four $25 gift cards from different stores.

Gift your miles for travel 

A rather unique way I've decided to use miles is by giving them to friends and family as the actual gift. I have at least two loved ones that have been dreaming of taking a vacation for quite some time, but because of lost jobs and the pandemic, their disposable income is rather tight.

I've decided to give them around 30% of the miles I've earned from the JetBlue Card to redeem for award flights — they'll get to pick the destination and how much they want to spend. JetBlue allows family members to pool points for free (many other airlines charge a fee), and it's easy to transfer these points directly through the airline's website. 

Use miles to erase purchases 

Since there are always last-minute gifts I find myself scrambling to buy, I'm going to set aside Capital One miles to cover purchases that I make on my card. These "night before the holiday" gifts are usually little things I pick up at local shops, and although I won't get the maximum value from my miles, I'll still save cash.

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Disclosure: This post is brought to you by the Personal Finance Insider team. We occasionally highlight financial products and services that can help you make smarter decisions with your money. We do not give investment advice or encourage you to adopt a certain investment strategy. If you take action based on one of our recommendations, we get a small share of the revenue from our commerce partners. This does not influence whether we feature a financial product or service. We operate independently from our advertising sales team.

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