Does Using a Credit Card for Christmas Shopping Make Sense?

It’s that time of year again…Christmas is coming! Every day it seems there are more and more sales papers, catalogs, and those annual credit card offers filling the mailbox. Tempted to use a credit card this year? Does it even make sense to use a credit card at all for your Christmas shopping? Surprisingly enough, using a credit card may not be such a bad idea this year, and here’s why –

  • Online Shopping – Every year, more and more people are doing their shopping online.  And, with places like competing for your business, it only makes sense to take advantage of the low prices and, in most cases, the free shipping.  However, using a bank or debit card, or writing a virtual check can put your bank account at risk, and potentially expose you to serious financial problems. While most banks will credit your account for fraudulent charges, it can take time, and effort to resolve these problems, and can damage your credit score in the process. Credit cards, on the other hand, are much easier to cancel, and you’re only liable for a small fee, usually around $50, in the event your card number is stolen.
  • Carry Less Cash – If you’re one of those people who loves to crawl the malls and discount stores on black Friday, you’ll definitely understand how easy it can be to have your wallet stolen in the crush of shoppers! Doing all your holiday shopping using a single credit card can eliminate the opportunity to have your wallet (your cash and your identity) stolen! At most, you’d only need to carry your credit card, and your driver’s license or other form of identification. Think how much easier it will be to grab those bargains this coming black Friday!
  • Purchase Protection – Many credit cards offer you additional purchase protection, and even insurance, if the goods purchased with your card are lost, stolen, or damaged within a certain amount of time. This additional protection can even extend will beyond the manufacturer’s warranty on an item. Even if you lose the receipt, your credit card statement will vouch for the original purchase, and you’ll still be covered! (This one’s especially good for those expensive toys that never seem to last past the new year.)
  • Cash Back (and other) Rewards Programs – What? Cash back for shopping? Yes. Using a cash back reward credit card for your holiday shopping can be a really smart way to save! In addition to getting those gifts on sale, you can get up to 5% cash back on qualified purchases, just for using the right credit card when you buy. Provided you pay the card off when you get the bill, you could reap substantial rewards from this year’s holiday shopping season.

So you see, using your credit card for Christmas shopping can be very smart, if you do so wisely! But, it’s important to be as prudent with your credit card as you would be with using your cash to shop…keep track of your purchases, and make sure you stay within your budget. That way, you won’t get that ugly January surprise when you receive the credit card bill.