Best Credit Cards for the Holidays
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With the holidays coming up fast, now is a good time to get a jump on your shopping. It’s easier on your budget when you plan out your holiday spending over a couple of months rather than cramming it all in during December. If you want to make your holiday spending even more effective, consider using a well-chosen credit card to make your purchases.
A card that offers an introductory purchase rate of 0% can make your spending more manageable. Even better? Cards with rewards programs and/or huge sign up bonuses. Not only can you complete your holiday shopping, but you can also reduce the overall impact to your budget with the help of cash back and rewards points. (See also: How to Choose Between a Cash Back or Travel Rewards Credit Card)
But the very best credit card can only benefit you if you're using it responsibly. All the cash back or travel reward points isn't going to cover the interest rate charged if you keep a balance. A good credit card does not replace planning and budgeting. It only helps take the sting out a little. Most of us spend more during this time of year, and it makes sense to use the holiday burst of spending wisely. Each of the cards noted below will help you do just that.
Best Cash Back Rewards
A good cash back rewards card will lower your holiday expenses automatically. (See all of our picks for the best cash back reward credit cards.)
Discover it® Cashback Match™ with No annual fee
The Discover it® Cashback Match™ with No annual fee offers 5% cash back in categories that change each quarter up to $1500 every quarter you activate, plus 1% cash back on all other purchases. As an exclusive offer for new cardmembers, Discover will match all the cash back you've earned at the end of your first year — automatically. Besides being a great cash rewards credit card, it also offers protection from APR changes due to late payments, no late fee, and you get your recent FICO Credit Scores for free on your statements and online. Identity theft is rampant during the holidays; with Discover's Freeze ItSM on/off switch, you can freeze or unfreeze your account in seconds via their website or mobile app.
This card currently has a sign-up bonus offer of 0% intro APR on purchases and balance transfers for 12 months — then a variable purchase APR applies (currently 11.24% - 23.24%). There is no annual fee.
Best Cash Back Sign Up Bonus
Some cards offer a nice sign up bonus in the form of cash back. Give yourself a little head start to help with your shopping list. (See also: 5 Best Credit Cards that Offer Bonus Cash Back for Sign Up)
Blue Cash Preferred Card from American Express
New cardmembers of the Blue Cash Preferred® Card from American Express get $150 back (as statement credit) after spending $1,000 in purchases within the first 3 months. Earn 6% back at U.S. supermarkets (up to $6,000 per year in purchases), 3% back at U.S. gas stations and select U.S. department stores, and 1% on other purchases. Terms and limitations apply. Finally, new cardmembers also get 0% intro APR on purchases and balance transfers for 12 months, then a variable rate of 13.24%-23.24% (depending on your creditworthiness and other factors) applies. The annual fee is $75.
Best 0% APR on Purchases
A 0% APR on purchases essentially is a free loan. Right now, the best cards offer up to 21 months of 0% APR. This will allow you to spend what you need to without incurring interest charges. The important thing is that you commit to paying it off within the time period. (See all our picks for the best 0% APR credit cards.)
Citi Simplicity® Card - No Late Fees Ever
The Citi Simplicity® Card - No Late Fees Ever from our partner Citi offers 0% APR for 21 months on both balance transfers and new purchases. After that, the regular balance transfer APR will be 13.24%-23.24% (variable), depending on your credit. There is a $5 or 3% balance transfer fee (whichever is greater). This card offers no late fees or penalty interest rates. There is no annual fee.
Best Travel Rewards
You can rack up a ton of miles on your holiday purchases. Give yourself a nice vacation for all the giving you'll be doing for others! (See all our picks for the best travel rewards credit cards.)
Chase Sapphire Preferred Card
The Chase Sapphire Preferred® Card has a great sign-up offer for new cardmembers: earn 50,000 bonus points after spending $4,000 on purchases within the first 3 months of account opening — that's $625 in travel rewards through the Chase Ultimate Rewards® portal. You can also earn an extra 5,000 points after adding an authorized user and make a purchase within the first 3 months from account opening. Earn 2x points on travel and restaurants and 1x points on all other purchases. With this card, you can transfer points on a 1:1 value to participating frequent travel programs, which means 1,000 Chase points equal 1,000 partner miles/points. There is an annual fee of $95 that is waived the first year.
Best 0% Balance Transfer
If you are already carrying a balance, it may not be wise to continue to rack up additional debt. But if you must spend during the holidays, giving yourself some interest-free breathing room can be a life saver. Better yet, use your best rewards credit card for holiday shopping, and then do a balance transfer to a new card. (See all our picks for the best balance transfer credit cards.)
The Chase Slate® offers 0% intro APR for 15 months on purchases and balance transfers as well as a monthly FICO Score and Credit Dashboard for free to help you monitor your credit. What makes this card special is the $0 intro balance transfer fee for transfers made during the first 60 days of account opening. You can move your holiday purchase balance over here to get a 15 month break from interest. There is no annual fee.
Savvy Credit Card Use During the Holidays
Make sure that you are smart about your credit card use during the holidays. Even though there are some great terms associated with many of these credit cards, you don't want to fall into the debt trap.
Do Your Best Only to Spend Money That You Already Have
Rewards credit cards are most effective when you make planned purchases, and then pay off the balance each month. That way, you earn the rewards, but you don't end up having their value eroded by interest charges.
If You're Going to Carry a Balance, Choose Your Card Wisely
If you think that you will need to carry a balance as a result of your holiday shopping, look for a rewards card with a 0% APR on purchases for a few months. Make a plan to pay off the balance before the end of the intro period. In any case, it's best if you avoid carrying a balance for more than three or four months. Choose a card with an intro period, and you can still earn rewards without paying interest.
With the right plan, you can take advantage of credit cards for the holidays, earning bonuses and rewards that can help you offset your spending, saving you money on purchases now and interest later.
Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and have not been reviewed, approved or otherwise endorsed by any bank, card issuer, airline or hotel chain.