Should You Use A Credit Card for Christmas Shopping?

Thinking about getting a brand new credit card to do your Christmas shopping this year?  Should you actually use a credit card to do your Christmas shopping?  Most credit experts would automatically tell you no, but is that really what’s best?

At first glance, it may not seem like a good idea to do your Christmas shopping using a credit card.  But, with today’s economy, sometimes it’s just really hard to come up with the cash you need, and especially if you have kids, you may not have a choice but to use those credit cards for gift purchases.

If that’s the way you choose to handle this year’s Christmas expenses, there are a few things that you should consider up front when looking for that new credit card.

  1. Make sure that you shop around – don’t apply for the first credit card that you see. Compare interest rates, cash back percentages, what qualifies for cash back purchases, and what the payment terms are.
  2. Don’t apply for multiple cards.  Every time that there is a “hard credit inquiry,” it can affect your credit score, so compare all of the cards first, and then only apply for the one that you like best and that you’ll be most likely to qualify for.
  3. Know your credit score.  Don’t apply for cards you’re not likely to be approved for – choose offers that are within your credit range.
  4. Try to get the card that offers you the most cash back, or even better, one with an introductory interest rate so you’ll save money when it’s time to make those payments.
  5. Make a solid plan to repay the charges, otherwise you’ll end up in even worse shape after the holidays are over.  Consider using your tax refund to pay it off in full and then don’t use the card until next Christmas!

So, you see, using a credit card for your Christmas shopping doesn’t have to be a bad thing.  Just make sure that you use credit responsibly and, if you manage your card right, it could actually help your credit worthiness in the long run.