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Holiday Credit Card Do’s and Don’ts

Last Updated: April 18, 2023
3 min read

Table of contents

Key points about: holiday credit card spending

  1. To stay within your budget, make a holiday spending plan to know how much you can afford to spend on gifts and décor.

  2. Use or apply for credit cards that may offer additional rewards for holiday shopping, like extra cash back at certain retailers.

  3. Review credit card statements so you don’t miss the signs of unauthorized activity on your accounts.

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 dos and don’ts to follow during the 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 extra 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 only 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 homemade 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.

Did you know?

Every Discover Credit Card offers cash back rewards. You can compare how much you can get back and in which spending categories to find the rewards credit card that fits you best. And they all have no annual fee.

Learn More About Rewards Credit Cards

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 credit card, a hard inquiry is made by a financial institution to decide whether you will be approved or denied. 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 be affected.

Do: Review your holiday credit card charges

Chances are you’ll use your credit card at a wider variety of stores and websites during the holidays than any other time 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 spending 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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