Budgeting Credit

Holiday Credit Cards: Are They Worth It?

The holidays are a time of shopping in stores, making online purchases, visiting your favorite restaurants, and celebrating. For all these holiday expenses, using holiday credit cards may make sense. However, holiday credit cards can come with pros and cons. So, before signing up, it will be essential to weigh both aspects when deciding whether they are worthwhile. 

Keep in mind for approval with most holiday shopping credit cards; you will need to have a fair-to-good credit score. You can also apply for online no credit check loans and lines of credit, which may be smart if you have a less-than-average credit score.  

Advantages of Rewards Credit Cards for the Holidays

Using credit cards during the holiday season can come with a considerable advantage. You can get credit card rewards for all the cash you may be spending anyways for holiday purchases. Here are a few credit card benefits: 

Cash Back Rewards or Bonus Points To Earn Cash When Shopping

For many people, the holiday season is when they do the most shopping in their year. 

Using a credit card for holiday gifts, decorations, grocery store purchases, online shopping, or other purchases you make can provide you with cash rewards.

Credit card cash-back can add up quickly during the holiday season and is a great way to earn on top of the money you are spending anyway. Rewards rates will vary from one credit card issuer to another. And there may be a quarterly maximum, minimum spending amounts, and other conditions to be eligible for cash-back. 

Once you get your rewards, you can have the funds sent to your bank account or used directly as a statement credit. You can also use credit card cash-back to build an emergency fund.

Here are a few examples of cash-back credit cards from various banks and credit card companies:

Chase Credit Cards for Cash Rewards:

  • Chase Ultimate Rewards 
  • The Chase Freedom Card
  • Chase Sapphire Preferred® 

Citi Credit Cards for Cash-Back:

  • Citi Simplicity® 
  • The Citi® Diamond Preferred® Card
  • City Custom CashSM 

Discovery Cards for Cash Rewards:

  • Discover® It Card 
  • Discover® It Chrome

American Express Credit Cards to Earn Cash: 

  • Blue Cash® Everyday
  • Blue Cash® Rewards

These are just a few of the cash-back credit cards out there. Compare the different terms to find the best option to save big on your holiday budget through cash-back rewards..

And to get even more back, look into a double cash card, an unlimited cash back rewards credit card, or bonus categories (these are usually rotating categories). 

A Store-Specific Reward Credit Card

Many stores have a rewards credit card that provides different discounts for eligible purchases, bonus rewards, and special financing through their credit card.

If you think of doing your holiday shopping in one specific store, it may be worthwhile to look into store credit cards. The Apple Card, Target’s Red Card, and Ulta’s Ultimate Rewards credit card are just a few examples of store-specific credit cards. 

Travel Benefits With Holiday Credit Cards

Many credit cards can provide you with travel points, hotel stays, travel benefits for eligible travel purchases or everyday purchases. Usually, you must redeem rewards from these cards for only travel-related expenses.

 Here are some examples of travel rewards credit cards:

  • Capital One Venture Rewards Credit Card 
  • Chase Sapphire Preferred Card
  • The Platinum Card from American Express

Gas Mileage and Other Eligible Purchases

A few credit cards offer gas rewards every time you fill-up. Some credit cards only provide bonuses towards specific gas companies or grocery stores (that provide gas stations). In comparison, others are less limited with their credit card rewards. A credit card with gas rewards can be a great perk for those driving during the holidays. 

Advantage of Balance Transfers During the Holidays

A balance transfer credit card allows the transfer of one or more credit card balances onto it. Balance transfer cards can come with low-interest rates (sometimes no interest for a limited time) with a potential balance transfer fee. 

Suppose you are using various credit cards for holiday shopping to get the most rewards possible. In that case, you may want to consider a balance transfer for lower interest rates and manageability. 

Using a No-interest Introductory Period for Your Benefit During the Holiday Season 

Some credit cards offer introductory bonuses where there is no interest! A zero-interest initial period can be a huge advantage when you spend a considerable amount and want maximum rewards—but want to avoid interest payments to save money. If you are a new card member of a specific credit card, you may be eligible for this introductory period. 

Disadvantages of Holiday Credit Cards

Although holiday credit cards can come with some advantages, there are a few drawbacks to look into when analyzing whether holiday credit cards are worth it:

The Annual Fee, Foreign Transaction Fees, and a Balance Transfer Fee With a Credit Card

As mentioned briefly, various fees can come with using credit cards; here are a few: 

  • An Account Opening Fee and an Annual Fee 

Sometimes when you open up a credit card, there will be a fee for the new account and an annual fee due every year the account is active.

  • A Balance Transfer Fee

A credit issuer charges a balance transfer fee for large amounts of credit cards sent over to their card.

  • Foreign Transaction Fees

Using your credit card outside of the United States can mean extra fees for the service. 

The Interest Rates for Holiday Shopping and Cash Advances  

Whatever credit card issuer you choose to inquire with will state interest rates in their online credit card application. Interest rates for credit cards can vary quite a bit. Regardless of your credit card interest rates, make sure to keep track of how much interest you are paying. 

Every time you are shopping online or making any holiday purchases in person, you will increase your card balance. All these combined purchases for the holidays will then have interest attached to them. 


When using credit cards for a cash advance, the interest rate is often higher. Calculating interest on your credit card balance is relatively simple and can help determine whether you can continue spending. 

The Potential of Losing Sight of Your Holiday Budget

Because credit cards make money readily accessible, they may tempt you to increase your holiday spending budget, even without the income or savings to do so. Once that credit card bill comes, and you cannot afford to pay it off, you can end up in debt.

Credit card debt is a significant issue for many Americans. And to ensure you don’t join that list because of the holidays, it is imperative to be mindful of your gift purchases with a credit card. 

The Impact on Your Credit Scores When Using Credit Cards for Holiday Expenses

Another vital part of credit card usage is to consider the impact on your credit score. Applying for multiple credit cards or loans can hurt your credit. 

One significant part of your credit score is the ratio of your open lines of credit to your balances. 

In general, the lower your debt balances, the better the impact on your credit score and vice versa. And so, before signing up for credit cards for bonus cash to spend on the holiday shopping season, consider how much debt you have. Also, be sure to learn the basics of managing a credit card wisely. 

Should I Get Holiday Credit Cards?  

Before Using credit cards for holiday expenses, review the pros and cons. 

A credit card comes with benefits when used during the holidays! You could earn cash on travel purchases, money and rewards at grocery stores, gifts from major retailers, and extra rewards from rotating categories. Holiday credit cards can help you save money and reward you for holiday spending. 

However, these rewards cards may not work well for everyone.

Credit cards can come with high-interest rates and various fees such as foreign transactions fees, a balance transfer fee, and an annual fee. They can also lead to long-term debt and impact your credit score. 

And so, depending on your needs and your personal finances, holiday credit cards could be worth it for you.