Consumers have an opportunity to earn extra cash by doing their holiday shopping on credit cards as card issuers are offering new rewards for credit in order to steer consumers away from debit.
"The rewards have become very, very attractive in terms of cash back and travel," Bill Hardekopf of LowCards.com said, Reuters.com reports. "Issuers have stepped up the rewards because it's now more lucrative for the banks for you and me to use our credit cards instead of our debit cards."
Once the federal government placed a cap on how much banks could charge for debit card interchange fees, card issuers began boosting rewards for credit cards, which do not have an interchange fee cap.
"Rewards have been generous, in general, because issuers are trying to get back consumers they lost in the recession," Beverly Blair Harzog, a credit card expert with Credit.com said, according to Reuters.com. "I'm particularly seeing a lot of cash-back bonuses."
Chase and Citibank have already promised new applicants $200 in cash once they spend $500 on their credit cards.
MasterCard is also promoting its seasonal offer that includes a $200 rebate on the first $500 charged to its new Citi Dividend World Card.
Hardekopf said customers can make the most of their credit card rewards by combining their rebates with rebates from merchants, Reuters.com reports.