Using Credit Cards For Christmas Shopping

Finances and spending during the holidays can be stressful. It can be difficult to find room in your budget to buy gifts, travel to visit relatives, and any other holiday expenses you may have. 

When faced with a one-time increase in expenses, such as holiday spending, people often plan to put all their purchases on a credit card. If you’re using the wrong type of credit card or don’t understand how to use a credit card wisely, this could be a bad idea for your long-term financial success.

For the sake of your credit and your budget, it’s important to use only the best credit card for Christmas shopping. The best credit card for you may depend on your credit score, spending habits, and needs, in addition to your holiday plans. 

Arkansas Federal Credit Union offers credit cards with low-interest rates and rewards that can be great options for your Christmas credit card. Our low-rate credit card consistently has one of the lowest rates in the country, and our cash-back credit card also offers a low interest rate. Regardless of what card you choose, neither one has an annual fee. Contact Arkansas Federal today to learn more about how these credit cards can help you with your holiday shopping.

Best Holiday Credit Card Tips

These holiday credit card tips can help you decide which credit card is best for your holiday shopping and help make sure you’re using your credit card in the right way to help you save money during the holidays.

Low Interest Rates

It’s a good idea to search for a card with a low-interest rate if you’re planning on paying off your credit card balance over time. With a lower interest rate, you will spend less as you pay off your credit card balance because your interest is lower. Arkansas Federal offers an everyday low-rate credit card that is available to apply for year-round.

Credit Card Rewards

Rewards and cash-back programs are a major benefit of using credit cards. Some companies may offer holiday card deals or rewards programs. At Arkansas Federal, our cash-back credit card allows you to earn 2% cash back on every dollar you spend year-round. You can use your cash-back to help pay for your credit card purchases or to redeem for something else.

Set a Budget

For a time of high spending, setting a budget and planning your purchases can help you make sure you don’t overspend. With a holiday budget, it’s a good idea to be as detailed and specific as possible. Breaking down your expected spending into categories with a maximum spend amount can help you stay on budget. When working with a holiday budget, keeping holiday expenses on one credit card can help you keep track of your spending and how you’re doing with your budget.

Check Card Charges

Because of the increase in purchases, particularly online purchases, fraud can be more prevalent during the holiday season. It’s a good idea to check your credit card transactions regularly to make sure there aren’t any fraudulent transactions. Arkansas Federal credit cards have $0 fraud liability, meaning you won’t be held responsible for fraudulent charges made with your cards or card information. 

Pay as You Go

Paying off your credit card throughout the month as you make purchases can help keep your credit utilization low. Using a high percentage of your available credit can hurt your credit score. Making credit card payments as you make purchases can help you keep your credit usage low.

Pay More Than the Minimum

Every month, there’s a minimum amount of your credit card balance that you are expected to pay. Paying more than the minimum amount can help you keep your credit in good standing and avoid the possibility of late payments and fees.

Paying over the minimum amount can help you keep your costs lower and save money by avoiding interest payments. Transferring debt to lower-interest credit cards from higher-interest credit cards can help you consolidate payments and pay off your debt. 

Things to Avoid

If you’re planning on using credit cards for holiday shopping, there are a few things you should avoid to help save money and protect your credit score.

Applying for Credit Cards

A lot of stores offer their own credit cards. It can be tempting to apply for a credit card from a store that will offer you big one-time savings, especially during the holidays. However, credit cards offered by retail stores can come with high interest rates. Applying for a credit card also requires a credit check. Multiple credit checks in a short period of time can hurt your credit score if you decide to get multiple new store credit cards during the holiday season.

It’s not recommended to impulsively apply for a credit card for stores. To make sure the card is a good idea, you should take time to consider everything it offers and how frequently outside the holidays you’ll shop at the store. 

Don’t Use Public Wifi for Purchases

Public wifi can be less secure. If you can avoid it, it’s a good idea to refrain from making online purchases while using public wifi. When in public, it’s a better idea to use data or a hotspot when entering any personal financial information to make sure that the information is protected from potential hackers.

Maxing Out Credit Cards

Reaching your credit limits can be viewed as using too much credit and can hurt your credit score. The general rule of thumb is to only use 30% or less of your available credit to keep your balances low.

If you’re worried about overspending, you may be able to set up your accounts to send you alerts if you’re too close to your spending limits. Using only one credit card for all your holiday shopping is the easiest way to keep track of all your transactions. 

Missing Payments

Missing credit card payments could result in additional interest charges and late fees, which will add to your expenses and bills. Staying on top of your credit card payments and payment due dates helps you save money and keeps you in “good standing” with your credit card company. Missed payments and late payments also hurt your credit score, so paying on time keeps your credit history in good shape.

Apply For a Holiday Credit Card Today

One of the best ways to finance the holidays on credit cards is to use a low-rate credit card or a cash-back card. Low-rate and cash-back credit cards help you save money as you make purchases. With a low-rate card, you can save as you pay off your credit card balance by paying less in interest. Cash-back credit cards help you earn savings as you use your card.

Low-rate and cash-back credit cards can be a great way to make your holiday expenses more affordable. Before applying for a credit card, it’s important to do your research to find the best card and know how it will impact your payments and finances.

Apply for a credit card from Arkansas Federal today to start financing all of your holiday expenses in an affordable way.