Credit Sesame’s Top Credit Card Picks for the Holiday Shopping Season

This content is not provided or commissioned by the issuer. Opinions expressed here are author's alone, not those of the issuer, and have not been reviewed, approved or otherwise endorsed by the issuer. This site may be compensated through the issuer's Affiliate Program.

editor@creditsesame.com'/
Best Credit Cards for Holiday Shopping

The busiest shopping season of the year kicks off this week with Black Friday, and for most of us that means spending more than we normally would on our credit cards at any other time throughout the year. But it also means rewards — credit card rewards— and potentially, lots of them.

Used wisely, there are many rewards credit cards that can be a great tool for earning everything from bonus points to travel miles to merchandise to cash back on your holiday purchases. Plus, many card issuers sweeten the deal by offering signup bonuses, be sure you understand any requirements that need to be met to earn the signup bonus. Some cards have no annual fees and 0% Intro APRs on purchases and balance transfers to help keen cardholders not only earn, but save beyond shopping for Christmas.

So if you’re looking to maximize your holiday spending and put a little bit of that holiday cheer back into your own wallet, the right rewards credit card can help you do just that. Here, Credit Sesame highlights our top picks for the best credit cards on the market this holiday shopping season.

Some of the offers on this page have expired. In order to view other ​credit card offers, please click here.

For those with Average or Fair Credit, fret not. You can still earn rewards or cash back with a couple of good choices out there.

Barclaycard Rewards MasterCard®

Barclaycard Rewards MasterCard®For those with fair credit looking for a no annual fee card with a rewards program, the Barclaycard Rewards MasterCard® could be a fit for you. Earnings are 2X points on gas, utility and grocery store (excluding Target® and Walmart®) purchases. 1x points on all other purchases. Your points can be redeemed for deposits to a U.S. checking or savings account, statement credits or gift cards, starting at 1,000 points for $10. An added bonus is no limit on the number of points you can earn or redeem. Points don’t expire as long as account is open, active and in good standing.

 

Capital One® QuicksilverOne® Cash Rewards Credit Card

Capital One® QuicksilverOne® Cash Rewards Credit CardSimilar to the Quicksilver® card, the Capital One QuicksilverOne® Cash Rewards Credit Card card offers unlimited 1.5% cash back on every purchase. It’s a good choice for those with fair credit looking at a simple earnings structure. A nice feature is access to a higher credit line after you make your monthly payments on time for the first five months. This card has an annual fee.

 

For those with Excellent/Good credit you can earn rewards or cash back with other options provided here.

BankAmericard Cash Rewards™ Credit Card

BankAmericard Cash Rewards™ Credit Card The BankAmericard Cash Rewards™ credit card is an option for consumers who want cash back on every purchase, 2% at grocery stores and now at wholesale clubs, and 3% on gas up to the first $2,500 in combined grocery/wholesale club/gas purchases each quarter. Unlike other cards, there are no changing bonus cash back categories, yet earning is capped up to the first $2,500 in combined grocery/wholesale club/gas purchases each quarter. For all other purchases, the earnings rate is a consistent 1%. As a nice incentive, earn a 10% customer bonus each time you redeem your cash back into a Bank of America® checking or savings account.  If you’re a Preferred Rewards client, you can increase that bonus to 25% – 75%. Learn more about Preferred Rewards program on the BankAmericard Cash Rewards™ credit  card application page. The card has a $100 online cash rewards bonus after you spend at least $500 on purchases within the first 90 days of opening the account. There is no annual fee with this card.

 

Capital One® Quicksilver® Cash Rewards Credit Card

Capital One® Quicksilver®

For those looking for a steady cash back rate on purchases of 1.5% unlimited, with no rotating categories to keep track of and remember to opt-in for, Capital One® Quicksilver® Cash Rewards Credit Card may interest you. The card is currently offering a one-time $100 cash bonus after spending $500 on purchases within the first three months. With no annual fee this could be a good choice for all around general spending.

It’s tempting to use plastic to pay for holiday purchases. And that’s not necessarily a bad strategy, as long as you take some sound advice with you to the mall along with your naughty and nice list.

These tips will help you use your credit cards to your advantage, should you decide they’re the best option to pay for holiday gifts, gadgets and trinkets this year.

Don’t shop without knowing your balance

If you don’t know your balance, you could exceed your credit limit while you’re shopping, and that can get costly. That’s because you risk having a credit utilization ratio that’s very high.

“Your utilization ratio is the amount of credit you’ve used to the amount of credit you have available. For example, if you have a $1,000 across all your credit cards, and you have $300 of debt, then you’ve got a 30 percent utilization ratio,” says Beverly Harzog, a consumer advocate and credit card analyst/expert in Atlanta, Georgia.

So if you max out your card, you’re going to increase your ratio. Going above 30 percent can have a negative impact on your credit score, warns Harzog. “Your utilization ratio makes up 30 percent of your FICO score. That’s significant!”

“To be able to exceed your credit card limit, you have to ‘opt in’ and be willing to pay an over-the-limit fee, which averages around $29 to $39,” says Harzog. To find out what the fees apply, check your credit card’s terms and conditions disclosure statement.

If you haven’t opted in, your credit card will be denied at the register. “It’s best, of course, to avoid going over your balance, so opting in isn’t something I’d recommend,” says Harzog.

Brush up on your rewards

Harzog cautions that too many shoppers could be unnecessarily spending money at the mall this year because they’re not tapping into unused rewards lurking around to offset some holiday gift expense.

“You can use reward points for all kinds of gifts,” she says. “I do all my holiday shopping with a rewards card because I want the cash back.”

But Harzog also says she doesn’t carry a balance on her rewards cards and she doesn’t charge more than she can pay in full when the bill arrives. “Rewards cards have higher APRs so if you carry a balance, you’ll just wipe out your rewards. That’s why I don’t carry a balance on those cards.”

Be wary of helpful cashiers

Holiday check-out lines are stocked with smiling sales people offering you discounts, bonus points and so on if you opt to open – and charge your purchase – a new store credit card.

These cards have high interest rates and applying for one can ding your credit score a little.
Harzog suggests reading – not skimming – the card’s disclosure statements before agreeing to that 10 or 15 percent off your purchase. “Check the purchase APR, how long the grace period is so can avoid paying interest, if there’s an annual fee, and if there are any other fees that come with the card,” she cautions.

For instance, getting 10 percent off of a $100 flat screen creates a “sale price” of $90. That, plus applicable sales taxes, is charged to your new account that has a whopping 21 percent APR. Unless you pay off the entire balance when the first bill arrives, that discount will be costly. If you pay only the minimum monthly payment (in this case about $10) the price for that “sale” TV just jumped to about $107 the 31 days after you bought it. That’s $7 more than if you never opened the card and just paid the full non-promotional price. Now imagine that on a larger purchase amount, like $500, $1000 or more.

Many cards charge 22.9 to 26.99 percent APR so that checkout ‘discount’ could cost you double – or more – than if you paid full price depending on how long it takes you to pay off the card’s balance.

“If you’ve read the disclosure statements and it looks like you’ll benefit from the card, then go ahead and apply. But don’t apply for a store credit card unless you make a vow to yourself that you’ll never carry a balance,” says Harzog.

Holiday gift cards – what you really need to know

The National Retail Federation says that during the holiday season, gift cards are not only the no. 1 most purchased item, but also the no. 1 most desired item. So let’s get the facts straight before you purchase more plastic.

Rule #1: Know What They Really Want Or Else

My brother is easy. He likes Hollister or one of those trendy man-boutiques where a $100 gift card will barely cover the cost of a t-shirt. But if you’re buying for someone whose tastes are harder to identify, you can still go the gift card route. Gift cards come in a couple of forms: open-loop cards (those that are issued by a bank or credit card) or closed-loop cards (those issued by a retailer for use only with that particular retailer).

Open-loop cards are growing in popularity because they can be used at any store just like a credit or debit card; however, with that freedom may come additional fees and restrictions.

Rule #2: Ask About Fees

If you buy a retail card, don’t forget to ask about the hidden fees, although additional fees are more common with prepaid Visa, American Express and MasterCard gift cards.

Expect that if you buy the gift card online or over the phone, you will pay a shipping and handling fee. A prepaid Visa gift card through Chase Bank will cost you $4.95 in shipping. Express delivery (2-3 business days) will cost an additional $15.95. While a great majority or retailers will ship your gift card purchase for free, some, like Target have nominal fees. On the other hand, Boston Store charges heftier fees: $7.95 for standard shipping, $17.95 for express (2 days) and $27.95 for overnight shipping.

On top of shipping, there may be service charges to ask about. Service charges apply to online or over-the-phone orders. For example, MasterCard charges a $3.95 service fee for online buyers. Sometimes fees are even more expensive for those ordering over the phone.

Rule #3: Ask About the Fees for the Recipient

Nothing like a boat load of fees to ruin the holiday spirit, huh? Well, for many bank cards, the fun has just begun. Most cards include a maintenance fee, sometimes charged monthly from the beginning of activation and sometimes charged only after the first six or 12 months. Check and then let your recipient know that he or she should use their gift card promptly to get the most out of it.

Rule #4: Keep Track of Your Balance Yourself

Most cards will have a number on the back with which you can check the balance, or with retail cards, you can check at the location. Beware, bank cards can have sneaky fees attached to this seemingly benign activity.

Rule #5: Use ATMs with Caution

Unlike retail cards, bank cards can often be used at ATMs, but often a hefty fee is attached. Check before you use your gift card this way.

Rule #6: Use Your Gift Card Like Cash (Read: Don’t Lose It)

While there are a growing number of retailers who will replace a lost or stolen gift card, most treat gift cards like cash, if you lost it or it’s stolen, it’s gone.

Bank cards are typically more generous in this department, but expect a (surprise!) fee, ranging anywhere from $5.95 to $15 for a replacement card.

Rule #7: Find Out About Expiration Dates

Thanks to Phase III of the Credit CARD Act, which went into effect Aug. 22, 2010, the life of gift cards have been extended to five years. One caveat: those maintenance fees can still eat away at your balance. It’s still best to use your card right away.

Breaking the Rules What if you *gasp* get a gift card that you don’t like? Sites like giftcardtrader.com and plasticjungle.com make trading, buying and selling gift cards easier than ever. Now, if only those sites had been around when my uncle gave me that Country Store gift card. Oh well.

Post-holiday blues

Unfortunately, you’ve got more hanging around from the holidays than just a pesky five pounds and a brown evergreen wreath that you keep forgetting to take down from your front door. You went “a little” overboard buying gifts for people — and you have a mountain of credit card debt, along with a 14 percent interest rate, to show for it.

But now that it’s post V-Day and you’re still staring down another six weeks of winter (thanks, Punxsutawney Phil!), those revolving balances on your credit cards are giving you major agita — not to mention, costing you a pretty penny, too. Last year, Consumer Reports estimated that 7 percent of all shoppers went into the 2014 holiday season carrying debt from the previous holiday shopping season. You certainly don’t want to be making payments on this debt for another 10 months, so you’ve resolved to pay off lingering post-holiday credit card debt for good. Here are six strategies that can help.

1. Go on a spending freeze.

The idea of this might have you crying “no, no, no!” but eliminating all those non-essential expenses (think: dinners out, mani/pedis, and bulky winter sweaters marked half off) is one of the fastest ways to dig yourself out of debt. If you feel like you can’t give up all the pleasures of life until your balance owed is zero, go on a spending diet for a month — or even a week — at a time until you’ve completely paid off your plastic.

2. Transfer your balance.

Now that your naughty shopping behavior has caught up to you, redeem yourself by taking advantage of a 0% Inroductory APR balance transfer offer. Moving your existing balance to a new credit card can be a financially savvy way to pay off credit card debt without all the added interest. You’ll likely have to pay a balance transfer fee (usually 2-3% of the total transferred balance), but assuming that you attack your revolving balance aggressively and pay it off before the promotional period ends — while not racking up any new charges— you’ll end up saving a lot of money. Here are some of our favorites.

3. Determine your preferred payment plan.

Do you want to pay the least amount in interest? If so, determine which card has the highest APR and put as much as possible towards it while paying just the minimum on all your other cards. If you need the mental boost of paying off one card, however, focus the bulk of your money towards the lowest balance. Then, once you’ve eliminated it, turn your efforts towards the second lowest and so forth.

4. Consolidate your debt.

Did you fall victim to every salesperson who asked, “Would you like to open a store credit card and save 10 percent?” Retail credit cards usually ding their users with high interest rates. In fact, the average retail credit card charges an APR of 24.48 percent, compared to around 15 percent for traditional cards. Moving this debt to a low-interest credit card will not only save you in interest charges, it’ll enable you to pay off the balance much quicker.

5. Consider a personal loan.

Assuming that you’re in good standing credit-wise (you can check your free credit score monthly with Credit Sesame), this consolidation option could land you better terms than what you’re currently getting from your credit card. While personal loans have higher interest rates than those that you put up collateral for (mortgage, auto loan), they do often offer a lower interest rate than your plastic — meaning that they’re ultimately better for your bottom dollar.

 6. Use cash.

Adding new charges to your credit card can make it difficult to determine how much you still owe from the holidays. Until you get rid of all your debt, stick to paying with greenbacks or your debit card. Seeing that outstanding balance shrink each month will motivate you to work even harder to get it down to zero.


Disclosure: Credit Sesame is an independent comparison service provider. Reasonable efforts have been made to maintain accurate information throughout our website, mobile apps, and communication methods; however, all information is presented without warranty or guarantee. Please visit the provider’s site for current information and verify all terms and conditions of any offer prior to applying. The editorial content on this page is not provided by any company or credit card issuer. Any opinions, analyses, reviews or evaluations provided here are those of the author’s alone, not those of any company or credit card issuer, and have not been reviewed, approved or otherwise endorsed by any company or credit card issuer. The offers that appear on this site are from companies from which we may receive compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). This site does not include all companies or all available products or all available credit card offers. All images and trademarks are the property of their respective owners.

Responses are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.

You can trust that we maintain strict editorial integrity in our writing and assessments; however, we receive compensation when you click on links to products from our partners and get approved.
Published November 24, 2014
Related Links

Leave a Reply