If you haven’t started to rack up the credit card bill, then this week during crunch time before Christmas you will really start to see that balance escalate quickly. While it’s always a good idea to budget so you can save up throughout the year so it’s less of a burden all at once, getting scared when you see the statement come in, wondering how you are going to pay it on time without carrying over to the next month and collecting interest. While it does take plenty of discipline using a credit card over cash/debit, making sure you stay within spending reason, it actually can make good financial sense to use a credit card around the holidays during your mass rush to get all of your purchases in time to have wrapped before Christmas.
It’s bad enough that you hear about your card’s information being scanned at the gas pump, or probably a quick picture taken of your card if left out too long when paying a tab (I’ve had both happen to me), or even more out of your control, getting an entire store compromised for all of its customers, that more and more thieves will be out on the prowl with shopping coming to its peak this week. The great thing about a credit card is that if your info is stolen, you don’t have to worry about your bank account getting cleaned out while you sort it out.
Hidden Extended Warranty
It was actually last summer that I learned that I had rental car coverage with my credit card that I used to rent a car to take to Key West that got scratched when it was parked for a couple days, that I was on the hook for when it turned it in, and fortunately I used my card! Well if you use your credit card to make purchases, you may find that your creditor offers an additional extended warranty that goes beyond the manufacture’s. It’s worth a try at least.
Cash Back Rewards
Really the best reason to use a credit card for not only all of your holiday purchases, but every purchase in general, is watching the credit card rewards pile up with each purchase, whether depending on the card if it’s points that you can redeem for gift cards, miles, or even a cashback check. That will free up plenty of extra money whether you plan to keep your eye on penny stocks to watch, buy something you’ve been wanting, or enjoy free meals out with the gift cards that you were able to redeem. Hey at least it’s free.
One of the other perks that are sort of hidden, unless I was the only one to know, but some credit cards even offer price matching, which say you purchased a product and the price goes down in 90 days for example, your credit card will refund you the difference. Now considering all of the purchases that I have made with my credit card, there is no telling how much I could have gotten refunded if I would have known. Sure, it can be a lot of work to track those purchases, but if you gain savings every month it’s worth it.
Continues to Build Credit
While you will not help your credit score by carrying over a balance each month as that eats up your credit utilization, it definitely cannot hurt to charge and pay off your balance each month, maintaining not only a solid payment history, but also setting you up for continuous credit line increases by being a responsible borrower and not using all of the credit that has been extended to you. If you are in the market for a card with a better APR, and rewards, sure it may give you a few points of a hit in the short-term, will more than make up for itself in the long run with all the free money on the table.
Don’t Forget Online Shopping
Every year I say that I’m going 100% online for my Christmas shopping but I always tend to procrastinate and end up going out and fighting the traffic, crowds, lines, and shortage of product in person around Christmas. By taking advantage of virtually any website for any product out there, you can use your credit card to shop online with ease, with free shipping, so you can not have to worry about leaving your house and they will arrive on your doorstep, sometimes even wrapped.