Great article!! Especially now since it is close to the holidays, this was a perfect read. It’s good to know of the some of the best credit cards for the holidays.
Best Credit Cards for the Holidays
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. (See also: Early Holiday Shopping: Why I Finish by Thanksgiving)
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 signing 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.
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 Up Front Rewards Bonus
Chase Sapphire Preferred Card
If your goal is to use a sign up bonus to help defray your holiday costs, the Chase Sapphire Preferred card is a good choice. If you spend $3,000 in the first three months (put all of your holiday expenses on this card), you receive 40,000 bonus points. That’s $500 in rewards, which can be used as a credit on your card statement (known as a “statement credit”) to help pay off your purchases, or paid as a check to help boost your bank account after the holidays.
The Chase Sapphire Preferred card also has a great rewards program, including double points on travel and dining. There is a $95 annual fee, but that is waived for the first year, so you don’t have to worry about it this holiday season.
Currently unavailable
Best Ongoing Cash Back Rewards
Blue Cash Preferred (R) Card From American Express
If you are looking for a credit card with a great ongoing cash back rewards program, the Blue Cash Preferred from American Express is your choice. The rewards break down as follows:
- 6% cash back on purchases made at stand-alone grocery stores
- 3% cash back on stand-alone gas stations and select major department stores
- 1% cash back on everything else
This is one of the most consistently generous cash back rewards programs available. The program doesn’t use rotating categories, so it’s perfect for the holiday host or hostess looking to buy food items at the grocery store and helpful for those who do their gift shopping at department stores. The $75 annual fee is easy to overcome for the savvy shopper. If you spend just $100 a month at the supermarket, you'll break even.
(Note that there is also the regular, non-Preferred version called the American Express Blue Cash Everyday Card. The "Everyday" version has no annual fee, but cash back percentages are halved across the board. )
Also, the Blue Cash Preferred comes with a signing bonus of $150 if you spend $1,000 in the first three months. You can have American Express apply this bonus directly to your balance (as a “statement credit”) to help offset some of your holiday spending on the card.
Best 0% APR on Purchases
Citi Dividend Platinum Select Visa Card
If you think that you need a little extra time to pay off your holiday expenses, a card with a long introductory period for purchases can help. The Citi Dividend Platinum Select Visa has a 0% APR intro period of 12 months. Hopefully, you plan to pay off your purchases much sooner than that, but this card provides you with a little interest-free breathing room.
On top of that, you can earn a $100 signing bonus if you spend $500 in the first three months. You also get 5% cash back when you make purchases at electronics stores, toy stores, and Macy’s between October 1, 2012 and December 31, 2012.
Rotating categories throughout the year give you 5% cash back; the rest of your purchases earn 1% cash back.
Best Travel Rewards
Capital One Venture Rewards Card
Do you do a lot of traveling for the holidays? If you are looking for a way to build up your travel rewards quickly, you can use the holidays as a way to spur you forward. Use the Capital One Venture Rewards card to book your travel now and to make your holiday purchases, and you could fly free in no time.
You receive two miles for every dollar you spend, and you can redeem your rewards easily. Simply use the card to make your travel purchases, and then use a statement credit to offset the cost. There are no foreign transaction fees (perfect for holiday jaunts abroad), and the annual fee of $59 is waived for the first year.
By the next holiday season, you could be using the travel rewards from this card for totally free flights to visit family.
Best 0% Balance Transfer
Chase Slate
The Chase Slate is one of the only cards with no balance transfer fee and 15 months of 0% APR on balance transfers, if you transfer the balance within sixty days of opening the card. (Most cards charge a 3% fee on balance transfers, which can be a hefty amount if you're transferring a big balance.) The 15 month 0% APR also applies to purchases, and there is no annual fee.
If you are trying to get your debt under control and paid down, this card can help. You might even want to wait until after the holidays are over and transfer one of your higher interest balances to this card and avoid interest charges for carrying a balance.
Currently unavailable, consider the Citi Simplicity with 18 months 0% APR.
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.
I'd suggest to anyone to skip JP Morgan/Chase cards. Unfortunately, I have one. The number escaped into the wild, from a disreputable third party company. I phoned their customer service to get the card stopped and the number changed. I was told that they won't change the number or cancel the card. Their service people claim their systems are down. The service people have said the same thing for three straight days. Their service people also say that there is fraud protection. However, I have read the terms of service and as I understand those terms, the terms say that JPM/Chase can use binding arbitration to force the payment of charges, regardless of whether or not the charges are fraudulent. I now believe that something is going on, possibly nefarious. Please remember, these people recently lost $2,000,000,000.00, they have every reason to find "other" sources of revenue. I'm looking for another card provider. I urge you to find a different provider also.
After reading the post that was entirely dedicated to the Chase Sapphire Preferred Card, it definitely seems like a good deal, but especially if you're looking for a card just to make it through gift-buying season. As a very recent post-grad, I'm lucky that I'm not expected to get anyone too expensive this Christmas season.
The Discover More card is also paying 5% cash back on all Internet shopping as well as department store shopping for up to $1500 in spending from October through December.
You might also be interested in the rewards calculator at http://www.creditcardtuneup.com/ . You enter your average monthly spending in categories like restaurants, groceries, gas, airfare, hotels, etc. and it calculates the single best card as well as the best combinations of cards for your spending profile.
