Couple on holiday take bus selfie

Holiday Credit Card Do’s and Don’ts

Last Updated: February 16, 2022
3 min read

Nothing brings on the post-holiday blues like a credit card statement with a balance you can’t afford. Even the most financially responsible people can be swept up in the excitement of the holiday season and overspend on their credit cards. Here are a few credit card do’s and don’ts to follow this holiday season, so you can avoid starting the New Year with holiday credit card debt:

Do: Understand your current credit card rewards

Your credit cards may have additional rewards for holiday shopping, such as cash back from certain retailers, or for purchases made during Black Friday and Cyber Monday. Review your credit card agreement or talk to a customer service representative to learn about how your card can make your holiday budget go further.

Don’t: Rack up rewards at the expense of your holiday budget

Credit card rewards are a great way to get cash back on your holiday spending, but don’t make the mistake of charging items you can’t afford to earn perks. You may end up paying more in interest payments than the cash back you earned.

Do: Thoroughly budget your holiday spending

Before you head to the mall to start your holiday shopping, plan out your holiday budget. Knowing how much you can spend on gifts, décor and meals will help keep your spending on track.

Don’t: Spend money you don’t have

Many people feel pressure to make the holidays magical, but don’t succumb to the idea you need to break the bank to make it a season to remember. There are plenty of ways to enjoy the holidays without running up credit card debt. Consider making decorations with your family or friends instead of buying them, or giving home-made gifts instead of expensive presents.

Do: Get a credit card that offers rewards or discounts on a wide range of holiday spending

If you’re looking for a new credit card before the holiday season, select one that offers rewards that can be used with a wide variety of retailers. Discover cardmembers can redeem their rewards for a statement credit or bank deposit that can be used to pay for purchases at any retailer.

Don’t: Sign up for credit card offers at every retailer

As you go about your holiday shopping, nearly every major retailer will ask if you’d like to sign up for their credit card to earn a discount. Don’t be tempted to say yes to every one of these offers. Every time you apply for a line of credit, an inquiry is made by a financial institution to decide whether you will be approved or denied for a line of credit. New credit accounts for approximately 10% of your FICO® Credit Score1. If you sign up for many cards in a short period of time, it could appear to creditors that you’re having a hard time securing credit, and your credit score may go down.

Do: Review your holiday credit card charges

Chances are you’ll use your credit card at a wider variety of stores and websites in December than any other month of the year. The extra transactions mean it’s easier for you to miss signs of credit card fraud. Keep a close eye on your charges during the holidays so you can spot any unauthorized charges and immediately report them to your credit card issuer.

Don’t: Ignore your statement until after the holidays

It can be tempting to put your credit card balance out of your head and only focus on parties and presents during the holidays. Resist the temptation to “just deal with it after New Year’s” or you could seriously overspend your holiday budget. Check your credit card balance online at least a couple times during the holidays to get a reality check on how much you’re shelling out for the season.

Do: Consider transferring your holiday balances with a low-interest credit card offer

If your holiday spending did get out of control and you can’t pay your balance in full, you may save money with a low-interest introductory balance transfer offer when you transfer high interest debt.

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