You may want the holiday spirit to last all year long, but you’d probably prefer the credit card bills to disappear right away. But considering the National Retail Federation says it expects consumers to break holiday spending records in 2023, there’s likely to be plenty of shoppers who’ll be paying off holiday expenses well into 2024 and beyond.
But you don’t need to turn into a Scrooge to avoid holiday debt. There are even ways to earn credit card rewards and use credit card perks to save on last-minute gifts without blowing your holiday budget. Follow these tips throughout the holiday season and beyond to keep debt at bay while maximizing rewards points and cardholder benefits.
1. Earn a credit card’s welcome bonus
While applying for a new rewards credit card may seem like a recipe for holiday debt, a new card can actually let you earn rewards if you use the card responsibly. The key is picking a card with a good welcome bonus, and then using the card responsibly for planned holiday purchases and bills.
Fortunately, there are many credit cards to consider that have low minimum spending requirements to earn a bonus, whether you prefer general cash-back credit cards or store credit cards.
For example, the Prime Visa gives new cardholders a $100 Amazon.com gift card instantly on approval. And the Capital One Quicksilver Cash Rewards Credit Card* offers a $200 welcome bonus after new cardholders spend $500 on purchases within three months of account opening.
2. Take advantage of an APR offer to pay off big holiday purchases
If you still have a long list of holiday purchases to make but think you may not be able to pay them off immediately, consider applying for a credit card that offers an introductory 0% APR on purchases. With the right offer, you could earn rewards on last-minute gifts and have time to pay off your new balance while avoiding interest charges.
One option is the Chase Freedom Unlimited®, which offers cash-back rewards and a 0% introductory APR on purchases and balance transfers for 15 months from opening your account (then a variable APR of 20.49% to 29.24%).
To avoid being stuck with this year’s debt when the holidays roll around again next year, make a plan to pay off your balance well before your introductory period ends.
3. Use cards strategically to earn more rewards on holiday shopping
Have more than one rewards credit card? Make sure you’re using the right credit card to save money and maximize rewards for your purchases. For example, you could use one card that lets you earn bonus rewards at grocery stores for stocking up on holiday treats and gift cards and use another card with rotating reward categories to earn more on purchases at specific merchants.
And if you need one less thing to worry about this holiday season, consider using an app to track credit card rewards. They can make it easier to monitor your rewards balances and help you strategize how to earn and redeem the maximum rewards.
4. Use credit card rebate offers
Maximize the savings on last-minute purchases by taking advantage of available offers through your credit cards’ cash-back rebate programs.
These offers can vary quite a bit and may change over time, but they let you earn additional cash back or points on eligible purchases made with your card. To take advantage of the offers, just add them to your account online or through your card’s mobile app, then complete the required spending according to the card issuer’s terms and conditions.
The offers are usually personalized so they can help you save on purchases you regularly make anyway, but only if you can avoid overspending to meet the requirements. Not every card issuer has these programs, but Chase, American Express, Capital One and Citi are among the ones that do.
5. Redeem rewards for last-minute gifts
Have lingering reward balances you don’t plan to use? Instead of blowing your holiday budget, you may be able to redeem rewards for gift cards that you can use to cover holiday expenses or give as last-minute gifts.
Most cash-back and rewards credit cards offer the option to redeem rewards for gift cards, including American Express, Chase, Capital One and Wells Fargo.
You could even redeem your airline miles or hotel credit card points for gift cards. For example, it’s possible to redeem 49,000 points from an IHG One Rewards program account for a $100 gift card to Lowe’s or Kohl’s.
6. Create a plan now to pay off holiday credit card debt
Whether you still have debt from last year’s holiday season or you’re anticipating new credit card bills from this year’s shopping season, make a plan now to pay those balances off. It’s far too easy to fall into the trap of making only the minimum payment and paying interest month after month -- especially if you’re paying down debt at the current average credit card interest rate of 20.72%. To wipe out the debt, create a payment plan that fits your budget. If you can, start the plan this month rather than waiting until the credit card statements start arriving in 2024.
If you need help figuring out what you should pay or how much your credit card debt is costing you, our credit card payment calculator can help.
7. Consider a balance transfer card
Finally, don’t beat yourself up if you have credit card debt that won’t seem to go away. If you’re making payments but credit card interest is sending you further into debt every month, consider applying for a balance transfer credit card.
Some cards offer 0% introductory APR on transferred credit card balances for up to 21 months. However, remember that balance transfer fees may apply with the best balance transfer credit cards, which can tack on between 3% to 5% of the amount of debt you transferred upfront.
Also, remember that balance transfer cards will only work in your favor if you have a payment plan ready, you’re able to stick to it and you stop using credit cards for purchases. That last point is key since you can’t really dig your way out of debt if you’re still adding to the balance.
The bottom line
This year’s holiday spending season is supposed to be one for the record books, but that doesn’t mean you have to get stuck with credit card debt.
Earn and redeem credit card rewards strategically, make a plan to pay off balances and take advantage of the ways a credit card can be a valuable financial tool. By using your credit card responsibly, this holiday season can wind up being memorable for reasons other than the debt you incurred.
*All information about the Capital One Quicksilver Cash Rewards card has been collected independently by CNET and has not been reviewed by the issuer.
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