If used responsibly, a credit card can actually make great financial sense to use as opposed to cash/debit, which has funds coming directly out of your bank account. Not only will you be delayed a month in paying back, which could give some relief in payment during a normally high spending season, it also provides a few other perks that you can take advantage of this holiday season that should not be avoided.
Better Fraud Protection
With so many shoppers using plastic this holiday season will be sure to bring out the scammers. Even the large retailers such as Target can get compromised, so in that regard there is no avoiding, and even with those that steal credit card numbers from the gas pump. In the event that your info gets stolen and you see fraudulent charges on your account, it is better to have that be on a credit card. With a debit card, the funds have already been taken out of your account and remain out until the charges are disputed and return to your account, which could take a couple weeks. With a credit card, the may remain open on your account, but will likely be settled and removed before the next statement balance is due.
Rewards Will Add Up
By making the charges that you would have normally made with cash or a debit card, you would gain rewards dollars that would be missing out on otherwise. Depending on your rewards credit card, whether they come back as points, miles, or the best yet, a cash back check once a year, they could add up have significant value. For example, the Citi Costco card has cashback dollars of 1-4% of purchases, so not only using during the holiday season makes sense, but extending and using over the course of an entire year could get hundreds of dollars given back to you, which is huge. All for just making purchases, so as long as your spending does not go out of control with unnecessary expenses, then using a credit card for all purchases is smart.
Don’t Forget to Track the Balance
Now that you have opened yourself up for a potential spending spree you will need to still keep the balance on watch to make sure that spending has not gotten out of control. Stay within your allotted budget that you saved for Christmas shopping so that you are able to pay off the balance as soon as the next monthly statement comes in. The good news is that you will have a month to make sure you have the available funds to pay off the balance, but you could be in for a rude awakening when you see the scary balance come in if you have not been tracking and wonder how you will be able to pay it off. Any balance that carries over to the next month will begin collecting interest, and it can be a downward spiral from there if you are not careful.