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Holiday Credit Card Dos and Don’ts

4 min read

Last Updated: March 10, 2024

Table of contents

Key Takeaways

To stay within your budget, make a holiday spending plan to know how much you can afford to spend on gifts and décor.
Use or apply for credit cards that may offer additional rewards for holiday shopping, like cash back at retailers.
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 holiday shoppers can be swept up in the excitement of the season and overspend on their credit cards. Here are a few credit card dos and don’ts to follow during the festive season, so you can avoid excess holiday credit card debt.

Do: Understand your current credit card rewards

Does your current credit card have a reward program? A credit card with that offers rewards can help you earn back some of what you spend on your holiday purchases. For example, with the Discover it^® Cash Back credit card, you earn 5% cash back on everyday purchases at different places you shop each quarter like grocery stores, restaurants, gas stations, and more, up to the quarterly maximum when you activate. Plus, earn unlimited 1% cash back on all other purchases—automatically.

Rewards cards may help you save some extra cash back during holiday shopping. And, if you’re planning on traveling during the holiday season, a credit card with travel rewards may come in handy. For example, with the Discover it^® Miles travel credit card you can turn Miles into cash. Or redeem as a statement credit for your travel purchases like airfare, hotels, rideshares, gas stations, restaurants and more.²

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 making a purchase you can’t afford just for 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 Cashback Bonus^® for gift cards at popular brands, starting at $5.³

Did you know?

With Discover, earn cash back on everything you buy. You can compare how much you can get back and in which spending categories to find the rewards credit card that fits you best.

Learn More

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

As you go about your holiday shopping, many retailers will ask if you’d like to sign up for their credit card to earn a discount. It can be tempting to say yes just for the discount.

But every time you apply for a credit card, the financial institution may place a hard inquiry on your credit file before you’re approved or denied credit.

Plus, new credit factors into approximately 10% of your credit score, depending on the scoring model used. 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 on holiday purchases.

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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