USAToday

“The Zacek family of North Carolina learned how to really find a deal online, got the scoop on refurbished technology and was reminded that making a gift basket can be much cheaper than buying one. Those lessons helped keep them on track to meet or beat their agreed-to budget of $500 to cover gifts for their family of four.

The Zaceks are participants in the Frugal Family Challenge, a project created by USA TODAY and ABC’s Good Morning America Weekend. With help from a money coach and a technology expert, they set and tried to stay within a budget for Christmas.

Sue and Eldon Zacek originally planned to spend almost $1,200 on their children, 12 and 15, and each other. But with worries about job security — they work in the troubled banking and the auto-racing industries — they knew they needed to spend less.

Eldon, admittedly the spender of the family, agreed on a $500 total for the family, in consultation with GMA technology contributor Becky Worley and Olivia Mellan, a money coach, author and therapist.

After doing most of their shopping by last week, the family spent $265. That leaves about $200 for the children to spend on each other, their father and stocking stuffers.

“The family did great,”Mellan says. “This shows what a family can do (when it) consciously plans holiday spending, slows down the process, sets realistic spending limits and talks to all the family members in advance about how they are cutting back.”

“I’m amazed at these numbers myself,” Sue says.

Eldon was able to buy his gifts using American Express card reward points. Eldon has a NASCAR consulting business — his contract expires at the end of January — and uses his AmEx card for business and personal expenses.

Because we’re helping the Zaceks keep their gifts somewhat secret, we’ll say only that one of Sue’s biggest savings was on a gift Eldon asked for that retailed for about $1,800. Sue was able to find a comparable item for $600 from a different brand, but it was still well over what she could afford to spend. Worley taught Sue how to quickly search online for products with the same keyword attributes to find the gift at the best price. Sue was able to buy Eldon’s more pragmatic gift for less than $100.

Sue also got her daughter a comparable present that cost half the price of the gift pack 12-year-old Valerie had wanted. And Eldon is saving money by using his computer skills to create one gift.

Sue got free shipping on all the gifts bought online. She found the deals by doing an Internet search using the name of the website she was about to buy from and the words “coupon code.”

Typically in the past, cash back credit cards were giving cardholders meager rebates of 1% on all or most of your purchases. However, if you check some of the reward programs these days you will see some offers giving back 3-5% rebates on many purchases (i.e-gas, groceries, and utilities).

Because these credit cards usually charge higher interest rates, rewards card tend to be the most suitable for consumers who pay off their entire balance every month. Cardholders who like to carry revolving debt would be wise to choose a card with a low interest rate. The majority of all reward card programs are usually not appealing for these type of cardholders.(Possible exception: Discover Motiva Card- see below)

Relatively, many cash back reward programs are usually only appealing to big spenders because they cap the rebate amount you can receive in any month and/or in a year, and a few pay back a relatively small percentage until a certain spending level is reached.

In general, try to stay clear of reward cards who try to tack on annual fees on your statements. Also, be weary of reward cards that expire if they are not used within a specific time frame, or make it difficult to redeem points on the card. Unless the reward programs have especially attracting features (like a high rebate of 5%), I would bury these programs in the sand…

Now for the good news!! I have found and signed up to a few cash back reward cards which offer attractive features and no annual fees(unless offers have recently changed as of today….) Take at look at the cash back rewards cards below, and tell what you think. Also, if you have chance you should check cashback offers at MyMoneyBlog. I have found great offers and information on his site.

Blue Cash from American Express pays 5% cash back for grocery store, drugstore, and gasoline purchases after you spend $6,500 within a year, and 1% of any given purchase personally, I have been using my Blue Card for a few years now, and their program is the most reliable.

American Express One Card- This program only gives you 1% cash back of your purchases, but it places your cash rewards directly to a savings account, which pays an annual rate of 2.75%(rate as of July 30). Also, an additional $50 is place in your savings account when you make your first purchase. The OneCard hits you with a $35 annual fee, but that is waived in the first year (just make sure they do).

Discover Motiva Card-Now here’s an interesting concept, the Motiva Card gives back the cardholders seventh monthly interest payment as rebate each time the cardholders makes six consecutive monthly payments where a minimum payment is due. So I wouldn’t sign up for this card if you like paying off your balances every month. This card is more suitable for cardholders who do not pay off their card in full every month, and carry a balance. The Motiva Card currently charges a 4% APR(annual percentage rate) for the first 6 months and 12 months on balance transfers. After the introductory period, the APR goes up from 11% to 19%.

Chase Freedom Visa Signature Card- Last, but not least is the Chase Freedom Visa Signature card that gives 1% cash back on most purchases and 3% on the purchasing categories the cardholder spends the most money in any given month. The main categories include gas, groceries, utilities, department and drugstores. For more information visit the Chase credit card site.