Tis the season for Christmas shopping. If you are like many people who have become even more suspicious of credit card use during the recession, you might think that using a debit card is the way to go. However, you should note that, while debit cards are convenient and you don’t have to worry about paying interest on your purchases, there are some things debit cards just can’t do. Before you decide to use that debit card, consider the following reasons to use a credit card for Christmas shopping.
1. Rewards!
One of the best reasons to use a credit card during the holidays is for the rewards points. You’re going to be spending the money anyway, so you might as well get something back. You can earn reward points that can be redeemed for merchandise, travel, or even cash back. Be careful, though: If you carry balances into the new year, any rewards that you earn will be negated by interest charges. Consider the rewards that you want, and then do your shopping with that card. Look for special promotions from your credit card company that could result in double points on some purchases.
2. Purchase Protection
Many credit cards come with purchase protection. This means that there is an automatic warranty on some purchases. With some cards, you have return protection, allowing you to get your money back — even if the store won’t let you return your merchandise. This can be a huge help if you change your mind, or if merchandise turns out to be defective. Some credit cards even offer programs that allow you to get price protection. If the price drops within a certain amount of time, you might be eligible for a refund. Check your credit card terms to see what’s available to you.
3. Fraud Protection
It is true that many debit cards offer the same fraud liability protection that credit cards do, as long as you are using your debit card with a Visa or MasterCard logo, and you make signed purchases, rather than PIN transactions. However, there is a major difference between debit and credit cards in this area. With debit cards, the money is already gone from your bank account. You can’t access it until the issue is resolved and the money is put back. With a credit card, the money may appear on your balance until the problem is reversed, but you still have access to your cash in a bank account.
Having a Plan
Your best defence against overspending during the holidays — whether you use a credit card or not — is to have a plan. Make a budget and stick to it. This is a good rule to follow when you use credit cards for your Christmas shopping. Be sure to spend only what you have so that you can pay off your balance immediately. That way, you can reap the benefits that come with using a credit card while avoiding the interest charges.
Author Bio: Janet is a blogger and personal finance writer for CreditCardsCanada.ca, a web site specializing in helping consumers find the best Canadian credit cards.
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All of our gifts went on the card this year save the gifts between Mrs. SPF and I. We don’t want to ruin the surprise just in case one of us checks the purchases online. We use the card for all of the reasons you mention.
Those are all very true and wise reasons! Thanks for sharing!
Those are some good suggestions! I would add one more, it is easier to return an item if charged on your card.
How about expense tracking and “float.” If you pay the balance each month, you can earn interest on the cash you’d use for the payment. It doesn’t make much but every little bit helps!
I make sure to pay the balance before its due and enjoy the reward points!
It can be wise to use credit for investments. Give the gift of financial intelligence to a family member. Take advantage of those low interest credit card deals where they give you 2.9% or 3.9% interest for 6-8 months. Use those funds to lend a secured 2nd mortgage at 12% or 15% with a 6 month term. Sounds like a Merry Christmas to me!
It’s difficult to get knowledgeable people today on this subject, but you sound like you know what you are talking about. Thanks for this informative post.