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. (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 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.
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® offers 5% cash back in categories that change each quarter up to the quarterly maximum after you sign up for 5%, and 1% cash back on all other purchases. But the thing that makes this the ideal card for holiday shopping is the 5-20% cash back it offers if you shop via its shopping portal, which includes over 200 online popular retailers like Apple, Macy's and Best Buy. Besides being a great cash rewards credit card, it also offers protection from higher APRs due to late payments, no overlimit fee, and you get a free FICO® Credit Score on your monthly statement, online, and in their mobile app so you can keep track of your credit. It currently has a sign-up bonus offer of 0% APR on purchases and balance transfers for 14 months — then a variable purchase APR applies (currently 10.99% - 22.99%). A 3% fee applies to each transferred balance. 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.
Blue Cash Preferred® Card From American Express
Who wouldn't want an extra $100 to spend this time of year? Apply for the Blue Cash Preferred® Card to get $100 back in statement credit after you spend $1,000 on purchases on your new Card in your first 3 months. Not only that, but you get one free year of Amazon Prime. Need to send Xmas gifts? Make sure it gets there on time with your Prime membership! There is an annual fee of $75, however this card is a favorite among credit card users for its generous 6% cash back at supermarkets (up to $6,000 per year, then 1%) and 3% at US gas stations and select US department stores. The sign up bonus also includes 0% intro APR on purchases and balance transfers for 15 months (after that it will be a variable rate, currently 12.99%-21.99% based on your creditworthiness and other factors.
- Get one year of Amazon Prime plus $100 back after you make $1,000 in purchases with your new Card in the first three months.
- You will receive $100 back in the form of a statement credit.
- Hassle-free cash back: no enrollment required, the same great reward categories year-round.
- Earn Cash Back: 6% US supermarkets up to $6,000 per year in purchases, 3% US gas stations & select US dept stores, 1% on other purchases. Terms and limitations apply.
- Cash back is received in the form of Reward Dollars that can be redeemed as a statement credit.
- 0% intro APR on purchases and balance transfers for 15 months, then a variable rate, currently 12.99% to 21.99%, based on your creditworthiness and other factors.
- Terms and limitations apply.
Best 0% APR on Purchases
A 0% APR on purchases essentially is a free loan. Right now, the best cards offer up to 18 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 top 0% APR credit cards.
Citi Simplicity® Card
The Citi Simplicity® MasterCard offers 0% APR for 18 months on both balance transfers and new purchases. After that, the regular balance transfer APR will be 12.99%-22.99% (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 top travel rewards credit cards.
Barclaycard Arrival™ World Mastercard®
The Barclaycard Arrival™ World Mastercard® is a relatively new card that offers a great sign up bonus, double miles on travel and dining purchases, and 10% miles back when redeeming travel statement credits. The card offers a sign up offer of 20,000 bonus miles after spending $1,000 in the first 90 days — enough for a $200 travel statement credit, and 0% introductory APR for the first 12 months for each balance transfer completed within the first 45 days of account opening. (After that, a variable APR applies, currently 14.99% or 18.99% depending on your creditworthiness). There is no annual fee.
*Note: Barclay also offers an Arrival Plus™ World Elite Mastercard® with a $89 annual fee (waived the first year) that gives 40,000 bonus miles and 2x miles on all purchases.
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 top balance transfer credit cards.
Discover it® Card
This link will get you a 0% introductory APR on balance transfers for 18 months (but only 6 months for purchases) — then a variable purchase APR applies, currently 10.99% - 22.99%. This is different from the link from above, which gets you 14 months 0% APR on both purchases and balance transfers. Balance transfers are subject to a 3% fee. In addition to a great 18 month balance transfer rate, the Discover it card is a great cash rewards card, offering 5% cash back in categories that change each quarter up to the quarterly maximum after you sign up for 5%, as well as an online shopping portal that boasts 5-20% cash back with their over 200+ retail partners. There is no penalty interest rates, no overlimit fee, and there is no late fee for your first late payment. Plus, you get a free FICO® Credit Score online, in their mobile app, and on your monthly statement to help you stay on top of your credit. 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 card issuer.