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.
Holiday Credit Card Do’s and Don’ts
Last Updated: March 10, 2024
4 min read
Key Points About: Holiday credit card tips
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To stay within your budget, make a holiday spending plan to know how much you can afford to spend on gifts and décor.
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Use or apply for credit cards that may offer additional rewards for holiday shopping, like cash back at retailers.
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Review credit card statements so you don’t miss the signs of unauthorized activity on your accounts.
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 1% cash back on all other purchases – automatically.
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with no harm to your credit score1
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.
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.
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, the financial institution may place a hard inquiry on your credit file before you’re approved or denied credit. According to FICO, new credit accounts for approximately 10% of your FICO® Credit Score.3 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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There is no hard inquiry to your credit report to check if you’re pre-approved. If you’re pre-approved, and you move forward with submitting an application for the credit card, it will result in a hard inquiry which may impact your credit score. Receiving a pre-approval offer does not guarantee approval. Applicants applying without a social security number are not eligible to receive pre-approval offers. Card applicants cannot be pre-approved for the NHL Discover Card.
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Redeem Miles: Starting at 1 Mile, you can redeem your Miles as a credit to your account to pay for all or part of your bill, for cash as an electronic deposit to your bank account, or for a credit for Travel Purchases made on your statement within the last 180 days. Each Mile is equal to $0.01. Miles cannot be redeemed directly with a specific airline carrier. Travel Purchases include airline tickets, hotel rooms, car rentals, travel agents, online travel sites, commuter transportation, restaurants and gas stations. Restaurant purchases include those made at merchants classified as full-service restaurants, cafes, cafeterias, fast-food locations, and restaurant delivery services. Gas Station purchases include those made at merchants classified as places that sell automotive gasoline that can be bought at the pump or inside the station. Gas Stations affiliated with supermarkets, supercenters, and wholesale clubs may not be eligible.
Even if a travel purchase on your statement appears to fit in a Travel Purchase category, the merchant may not have a merchant category code (MCC) in a Travel Purchase category. Merchants and payment processors are assigned an MCC based on their typical products and services. Discover Card does not assign MCCs to merchants. Certain third-party payment accounts and digital wallet transactions may not be eligible for credit redemption if the technology does not provide sufficient transaction details or a qualifying MCC. See Terms and Conditions for more information.
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FICO® Credit Score Terms: Your FICO® Credit Score, key factors and other credit information are based on data from TransUnion® and may be different from other credit scores and other credit information provided by different bureaus. This information is intended for and only provided to Primary account holders who have an available score. See Discover.com/FICO about the availability of your score. Your score, key factors and other credit information are available on Discover.com and cardmembers are also provided a score on statements. Customers will see up to a year of recent scores online. Discover and other lenders may use different inputs, such as FICO® Credit Scores, other credit scores and more information in credit decisions. This benefit may change or end in the future. FICO is a registered trademark of Fair Isaac Corporation in the United States and other countries.
Discover Financial Services and Fair Isaac are not credit repair organizations as defined under federal law or state law, including the Credit Repair Organizations Act. Discover Financial Services and Fair Isaac do not provide “credit repair” services or assistance regarding “rebuilding” or “improving” your credit record, credit history or credit rating.
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