How To Use a Credit Card Like a Pro This Holiday Season

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Geber86 / iStock.com

Many Americans rack up credit card debt over the holidays, with the average debt exceeding $1,000, according to a 2019 survey by MagnifyMoney. If you use your credit cards wisely this season, however, you could actually save money. GOBankingRates asked shopping experts to share their favorite credit card hacks. From shopping for gifts to booking travel, there are many ways your credit cards can help you make the most of your money.

Last updated: Oct. 19, 2021

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Sign Up for a New Credit Card

Now could be a great time to take advantage of a sign-up bonus, especially if it’s a card that requires you to spend a minimum amount in the first three months of opening. Compare offers to find the best credit card bonus with a minimum spend that you can realistically hit.

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Look For Credit Cards That Offer 0% APR on Purchases

If you open a new card, look for one that offers a 0% annual percentage rate on purchases as an introductory offer. You should be able to pay off your balance in full every month — even during holiday shopping season — but this will keep you from getting hit with high interest rates on any leftover balances in case you can’t.

See: Reasons Why You Need a Cash-Back Card in Your Wallet

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Use Store Credit Cards To Get Discounts and Rewards

Using a store credit card can be one of the best ways to save money when holiday shopping.

“If you purchase a lot of items from a specific store, then it may be a good idea to open up a credit card with them,” said Jessica Myers, owner of the blog Now That’s Thrifty. “Frequent shoppers tend to earn a lot of points that can get them some great benefits like discounts and money towards your next purchase.”

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Shop With a Cash-Back Card

When you shop with a cash-back credit card, you automatically get money back with every purchase. Some cash-back cards offer higher cash-back percentages based on the purchase category, so keep that in mind when deciding which cash-back card to use for your holiday shopping purchases.

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Shop With a Rewards Credit Card

Shopping with a rewards credit card can help you save big on future purchases.

“The best way to take advantage of credit cards over the holidays is to maximize reward points,” said Ben Packard, CEO of Thrifty Points. “The holidays are an expensive time of year, and we’re all spending money left and right. Using a rewards card to manage your holiday spending is like getting an extra present under the tree.”

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Use Credit Card Points To Shop on Amazon

Alternatively, you can use your credit card points to shop Amazon directly. Many credit cards allow you to link your points with the online retailer, including American Express, Hilton Honors, Chase, Citi and Discover.

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Use Your Companion Fare for Holiday Travel

Holiday travel is notoriously expensive, so now could be a good time to cash in on any credit card fare discounts you might have. The Alaska Airlines credit card allows you to purchase a round-trip plane ticket for a companion traveling with you for as low as $121. And the Hawaiian Airlines Mastercard allows you one 50% discount on a round-trip companion fare.

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Use Cards That Offer Price Protection

It’s frustrating to buy someone a pricey gift only to see the price drop dramatically after Christmas. Although it’s become increasingly rare, some cards offer price protection, which can end up saving you a ton — especially on your holiday purchases, as prices do tend to drop after Dec. 25.

One card that offers price protection is the Wells Fargo Visa Signature. This protection can reimburse you for the difference when a price drops within 60 days of your purchase. The claim must be made within 10 days of the price drop being publicized.

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Use Cards That Provide Purchase Protection

Many cards come with purchase protection, which means you’ll be reimbursed if a product gets damaged or stolen during a given period of time. For example, the Chase Sapphire Preferred credit card covers new purchases against damage or theft for 120 days, up to $500. Consider using a card with this protection on gifts you buy online — it can protect you in case your items get damaged during transit or stolen from your front door.

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Shop With Cards That Offer Extended Warranty Protection

Purchase big-ticket items with a card that offers extended warranty protection.

One card that includes this perk is the Costco Anywhere Visa Card by Citi, which adds an extra 24 months of protection to a manufacturer’s warranty when you make a purchase with the card.

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Use a Mastercard To Purchase Gifts for Picky People

One of the shopping protection perks offered by Mastercard is a satisfaction guarantee. With this protection, if you — or the picky person you bought the gift for — decide you aren’t satisfied with a product and the store allow you to return it, Mastercard may refund you up to $250 for the item if you file a claim within 60 days of the purchase.

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Use a Card With Zero-Liability Protection

Many credit cards — including Visa cards and Mastercards — have zero-liability policies that protect cardholders from fraudulent purchases. If someone steals your card number and makes authorized purchases, you can dispute the charge and get your money back.

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Don’t Overdo It

The higher the balance you rack up, the higher your credit utilization ratio — and that has a big impact on your credit score. Keep in mind that a lower credit score means you can get hit with higher interest rates when taking out a loan, so putting too much on your card can end up costing you in the long run.

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Never Charge More Than You Can Afford

Using credit cards will only save you money if you don’t get slammed paying off high-interest debt.

“Make sure you are not charging more than you can afford,” said Myers. “Credit cards only save you money if you pay your whole credit card statement before you incur interest on it.”

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Create a Repayment Plan

If you do end up charging more than you can pay back right away, come up with a plan to pay down your credit card balance as soon as possible. This can include cutting back on expenses and funneling that extra money to your credit card bill, or taking on a side job to earn extra cash to pay off your debt.

If you’re stuck paying off high-interest credit card debt over a long time period, it effectively cancels out your savings and rewards. Keep this in mind to help you stay focused and stick to your holiday budget.

This content is not provided by American Express. 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 American Express.

Credit card offerings are subject to change.