When To Use Cash and When To Use Credit for Your Holiday Spending

Young family preparing for Christmas holiday.
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Holiday shopping season is upon us, and that means the search for the best deals is on. Some deals are even sweeter when you use a credit card to purchase them, but then again, some circumstances might call for using cash instead. Determining which is best for you to use depends on your individual financial situation. Here’s a look at when it’s beneficial to use a credit card, and when to hit the ATM for some cash. 

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Trying to Save Money? Stick With Cash

If you’re already struggling to pay off credit card debt, making a budget for holiday spending and adhering to it is crucial. There’s no better way to make sure your budget stays intact than to commit to only using cash.

It’s hard to keep track of exactly how much you’re spending when you’re shopping with a credit card. When you shop with cash, you can see exactly how much you have left after every purchase. Plus, some local stores might charge a service fee for using a credit card, so using cash bypasses that possibility, saving you money in the process.

Make Your Money Work for You

Cash also cuts down on any potential security risks, so there’s less chance of your identity getting stolen while you’re out buying gifts. If you don’t want to carry cash, your debit card will give you most of these benefits and still ensure you’re only spending the money you have. 

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Pay Off Your Balance Every Month? Get a Rewards Credit Card

If you’re someone who barely uses their credit card, or diligently pays off their balance every month, then this might be the time to take advantage of some credit card’s perks during the holidays. Some credit cards will offer you cash back depending on where you shop or the type of shopping you’re doing. Some banks will even match the cash back you’ve earned! Just be sure to read all the terms and conditions so you can make sure to get the most out of your card.

Want to Build Credit? Get a Prepaid Credit Card

You can still keep your budget under control, even with a credit card. Prepaid cards allow you prepay a specific balance on your card, letting you set an exact holiday budget ahead of time. This way you know exactly how much you have to spend and can keep better track. And since the card is prepaid, you don’t have to worry about accruing interest on your purchases; you just get to build credit, making it easier to apply for a loan or make a large purchase in the future. 

Make Your Money Work for You

Doing Your Shopping in One Place? Get a Store Credit Card

If you’ve shopped at a department store, you’ve definitely been asked to sign up for a store’s credit card. Though you’ve probably repeatedly turned them down, if you’re responsible with credit cards and tend to shop at the same store a lot, a retail credit card can be extremely beneficial. Some will offer a certain percentage off your entire purchase when you sign up, which can be a pretty big savings when you’re shopping for gifts or other holiday essentials. Also, store credit cards often have loyalty programs built in, where your cash back could become free money for that store. You can also earn access to promotions and extended return periods.

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Make Your Money Work for You

About the Author

Sam DiSalvo is an LA-based comedian, writer and actor who's performed all over the country. Her written work has appeared in numerous digital publications. As a copywriter, she's worked with a variety of major brands including GoldieBlox and Thrive Causemetics. Sam loves dogs and is currently perusing leisure suits to buy for her corgi mix, Barry
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