When to Use Credit Cards During the Holidays

Here at Golden State Debt Management, we believe credit cards are a great tool.  And if you are good at managing your spending, credit cards are also a good option for your holiday purchases.  Credit cards are convenient, efficient for bookkeeping or tracking spending and a great way to stack up rewards. Credit cards are also an excellent tool for building a good credit profile. 
 
Okay, maybe it’s a bit excessive to use credit cards for all your holiday purchases, but here are four times you absolutely should.
 
When should you use credit cards during the holidays? 

1. If you’re working on building credit. If you are unsatisfied with your credit score and are working actively to build your credit, it’s best to utilize credit cards. Making on-time payments and establishing long-time credit accounts count towards the health of your credit, so using credit cards is a great way to improve your score.
2. For easy rewards. Most credit cards offer a rewards program or benefit for signing up. During the holidays, there are often additional seasonal offers or discounts for certain purchases. Take the time to investigate what types of seasonal benefits are available through your creditor, and reap the rewards when purchasing! 
3. For large purchases. Using a credit card for large purchases allows you to >  invest in things like gifts and dinners  > extend repayment terms for your purchase. As long as you can afford the accrued interest for this added convenience, and have budgeted for it, then you’ve successfully used your credit card as a smart tool, without emptying your checking account. Additionally, you’ll probably earn significant creditor rewards for the purchase. This method of credit card use is similar to “financing”  because you can make monthly payments until the balance of what you owe is paid in full.  
4. During emergencies. We think it's important to have access to a credit card that is strictly for emergency use. The higher your credit limit, the better (for obvious reasons.) And for a not so obvious reason, because having unused credit reflected on your credit profile does wonders for your credit score.  Whether your tire goes flat, or you have to go to the emergency room, a credit card can come to your rescue.    

 
Credit cards are a great tool for holiday shopping. When used strategically, they help to make large purchases quicker than you could with cash and build credit and earn rewards!  When the cost of credit card debt becomes a problem and you find yourself stuck in a minimum payment trap, then it's time to give us a call or request a free debt analysis! Our debt programs help our clients gain control of their debts and pay the balance down faster than they would on their own (and at a fraction of the cost).