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. Before you sign up for a credit card, consider whether you are able to be financially responsible with it.
Cash Back Bonus
Some cards offer a nice cash bonus for new cardholders. Give yourself a little head start to help with your shopping list. Keep in mind that in order to get the bonuses, you have to meet spending requirements within a limited time period. Consider our list of Best Credit Cards that Offer Bonus Cash Back for Sign Up.
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 our picks for the best 0% APR credit cards.
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! The best travel credit cards to use for holiday shopping are the ones that offer flexible rewards redemption and high rewards for the categories you'll be spending the most in. See our picks for the best travel rewards credit cards.
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 our picks for the best balance transfer credit cards.
Cash Back Rewards
A good cash back rewards card will lower your holiday expenses automatically. Choose between cards that offer a flat rate on all purchases, or bonuses in categories you spend the most in. See our picks for the best cash back reward credit cards.
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.
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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.
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.