Author: Kelly Jones
The holiday season is quickly approaching, and many people will open their hearts and wallets. It is not uncommon for holiday expenses to exceed those of other months of the year. According to PricewaterhouseCoopers (PwC) research, the average American will spend $1,400 on holiday expenses.
If you plan on making purchases this holiday season, shopping for a new credit card before you go may be a good idea. Why? Whether or not you’ve made a budget and saved up for holiday expenses, charging your holiday expenses to a carefully selected credit card can be highly beneficial.
We’ll go over the benefits of getting a new credit card before you start your holiday shopping and how to choose the best card for your needs.
Why Should You Get a New Credit Card Before Shopping for the Holidays?
If you’ve been wondering whether it makes sense to look for a new credit card before beginning your holiday shopping, we’re here to tell you that it does and to show you what you could be missing out on.
Here are three reasons you should get one:
1. Maximize your Rewards and Earn Discounts
When you apply for a new credit card before the holidays, you have the best opportunity to earn the most reward points, which can help you qualify for discounts on your purchases. Examine your shopping list to determine which items cost the most, then select a credit card offering cash-back rewards.
Using a cash-back credit card makes sense because you get a percentage of what you spend back in cash for every eligible purchase. As a result, when you use your new credit card to purchase those expensive items on your list, you can rest assured that you’ll earn a reward that can even be transferred back into your bank account – which means you’re spending less.
When looking for cash-back credit cards, look for one with a sign-up bonus or a high earn rate for the group that includes most of your impending purchases.
2. Low Annual Percentage Rate (APR)
When charging your holiday expenses to a credit card, ensure you have enough money in your bank account to cover the repayment and avoid paying high-interest rates.
However, if you don’t have enough money saved to cover your holiday expenses and have no other way of getting the money, you might want to consider a 0% APR credit card.
You won’t have to pay interest on purchases with a 0% APR card for a certain period after opening it. So, if you can pay off your card before interest accrues, you may be able to save money on holiday gifts.
3. Pay for your Vacation
According to a PwC survey, approximately 45% of participants plan to travel for the holidays, with the majority of these participants flying. However, flight prices continue to rise, leaving many people dissatisfied.
If you’re planning a vacation for yourself and your family, a new travel rewards credit card could come in handy. Your holiday travels with this new credit card may result in points that will upgrade your next trip.
You may also earn hotel points, airline miles, and other rewards redeemable through specific travel websites. The more precise you are about the trip you wish to redeem your rewards on, the better. It will also assist you in selecting the best travel credit card for your needs.
Best Credit Cards for Holiday Shopping
Now that you know why you should look for a new credit card before going holiday shopping let’s look at some of the best credit cards for holiday shopping.
Wells Fargo Active Cash card
This card offers an unlimited 2% cash back on all eligible purchases and a $200 sign-up bonus after spending $1,000 in the first three months. With this card, you can expand your budget while doing all your holiday shopping.
Chase Freedom Flex card
This card provides users with numerous benefits, including 5% cash back on travel and 3% cash back on drugstore purchases and dining. You will also receive a $200 sign-up bonus if you spend $500 within the first three months of opening your account. You can also enable the rotating reward category, which includes rewards for Walmart purchases and PayPal transactions.
Citi Double Cash card
With this card, you can earn up to 2% cash back on every purchase. There is, however, no sign-up bonus. This card also has no annual fee and a 0% APR.
What to look for in a credit card for holiday shopping
If you choose a different card than the ones mentioned in this article, here are some things to look for before selecting a card:
- Check the credit card’s purchase protection and extended warranty.
- Look for cards with high rewards rates in categories you can use this holiday, as well as a sign-up bonus and 0% APR.
The Bottom Line
According to recent survey results, Americans will spend more this holiday season than in previous years, owing primarily to inflation. As you prepare to open your wallets this holiday season, you’ll want to cut expenses as much as possible, and a new credit card may be helpful. Choose a credit card that provides all the rewards you’ll need for your holiday shopping.