Top Three Credit Cards for Holiday Spending

The holidays are right around the corner, do you know what’s on your shopping list? If you’re like most people, you’ll probably use your credit cards when purchasing holiday gifts for friends and family.

There’s a right and a wrong way to use credit cards for holiday spending. Here’s a closer look at the credit cards that make financial sense to use during the Christmas season. These cards have excellent rewards, holiday-specific incentives, or other benefits.

What Features Should You Consider?

Using a credit card to buy holiday gifts is often a smart move. After all, you’re already committed to buying the gifts. Putting those purchases on a credit card allows you to earn rewards on the money you were already planning to spend.

Ideally, you’ll use the credit cards to purchase gifts, but then you’ll pay off most or all of the balance quickly. Doing so helps you avoid interest fees. Even if you’re not spending much, putting the purchases on your credit card helps build up reward points. 

Low APR

Plan your holiday budget early. If you don’t have quite enough in your bank account to buy the gifts you want (and who does?), consider getting a credit card for the holiday season. When choosing a new card, look for a 0% introductory APR. Having a few extra months to pay back your holiday purchases helps lessen the blow to your budget.

Useful Rewards

Not all rewards are equal. Cashback is the most versatile option. While travel-related rewards, such as airline miles, can be a benefit, they’re only useful if you like to travel.

Store credit cards, such as a Target Red Card, have both pros and cons. Typically, rewards are only available for use at the store. Make sure the store has the gifts you want to buy. Otherwise, the rewards will go unused.

Consumer Protections

Credit cards offer different levels of customer protection. For example, you probably want return protection. It’s a feature that allows you to return a purchase through the credit card, even if the original retailer doesn’t allow returns.

Purchase protection is another useful feature, especially if you’re buying large, expensive items such as electronics or toys. Purchase protection also covers any replacement if the item is damaged or stolen.

Additionally, some credit cards also offer warranty extension plans to augment any manufacturer warranties. Most extension plans offer 120 days of coverage. 

Top Credit Cards for Holiday Spending

 

1. Discover it Cash Back

The Discover it Cash Back card has a few features that are ideal for holiday shopping. Most notably, you earn double cashback during the first year of use. The cashback bonus is deposited into your account at the end of the year. If you start using your card in December, you’ll get the cashback the following December, just in time for next year’s holiday shopping.

Additionally, the card has several reassuring security features. Use Discover’s app to freeze the card if you notice suspicious activity. Plus, it offers warranty extension, purchase protection and price protection.

With 1% cashback, it’s probably not the best option for everyday shopping during the rest of the year. However, it’s an excellent choice for the holiday shopping season.

2. Amazon Rewards Visa Card by Chase

You’re probably already planning on ordering at least some of your gifts through Amazon this year. Earn extra rewards with the Amazon Rewards Visa Card by Chase.

This card has a few consumer-friendly features suitable for the shopping season. First, you get a $50 Amazon Gift Card right away when you’re approved for the card. You don’t even have to use the card, and you’ll still have a free $50 to spend on gifts.

Next, the card gives you three tiers of cashback:

  • 3% cashback on Amazon purchase
  • 2% cashback on gas stations, restaurants and drugstores
  • 1% cashback on all other purchases

It’s a great card if you do more of your shopping on Cyber Monday instead of Black Friday.

3. Chase Freedom

If you’re planning on spending more than $500 on holiday gifts, the Chase Freedom card is worth your consideration. If you spend more than $500 on the card within the first three months, they’ll give you $200 cashback. It’s a great way to help reduce your holiday bills.

Also, the card has a 0% APR for the first 15 months. You can spread out repayment throughout the year without worrying about accumulating interest.

Finally, the card is consumer-friendly. Purchase protection provides up to $500 of coverage for any item against damage or theft for up to 120 days after purchase. Additionally, an extended warranty augments any manufacturer’s or retailer’s warranties under three years.

Final Thoughts

According to the National Retail Federation, customers plan to spend an average of $1,047 during the winter holiday season. Fortunately, the right credit card can help you spend wisely and responsibly. All three of the cards listed above feature several specific ways to save related to holiday spending.

Proper planning is the best way to stretch your budget. Consider a new credit card. If you act now, your new card will be approved and ready to use to buy gifts for your family and friends. Make this holiday season one to remember! 

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