This article comes from DR at The Dough Roller, a blog about money management.
With the holiday buying frenzy in full progress, there is no better time than the present for some money saving strategies. One of them is simple, easy, and free–using the right credit card to make holiday purchases. Yes, credit cards can save you a bundle this holiday season, but only if you use the right card and use it the right way. So here are some tips on how to pick the right holiday credit card and use it responsibly to save a lot of money.
Pick the right holiday credit card
Saving money with a card starts by picking the right kind of credit card for purchases. The best cards for holiday purchases fall into one of two categories: cash back rewards cards or 0% APR cards.
With cash back rewards credit cards, you get a statement credit or cash back based on the amount you spend. This is the easiest way to save money during the holidays. Simply use a cash back credit card, and you’ll save as much as 5% or more on your purchases based on the cash back reward offered by the credit card.
The second option is to use credit cards with 0% APR offers on purchases or balance transfers. With this option, you save money by paying off your holiday purchases over time interest free. And some of the best 0% balance transfer credit cards also offer 0% APR on purchases.
The balance transfer option can allow you to save money twice. Here’s how. Many stores like Macy’s or Kohl’s will offer discounts if you use their store credit card. I know because my wife takes advantage of these discounts all the time. With a balance transfer card, you can take advantage of the store discounts, and then transfer the balance to a 0% card.
Best cash back and 0% credit cards
So now the question is which credit cards offer cash back or 0% APR deals that are great for holiday shopping. Here are three to consider, two of which are Consumer Reports picks for the best cash back credit cards.
1. Discover More Card:
This card offers up to 5% cash back with no annual fee. And if you shop on Discover’s online shopping site, you can save as much as 20%. The More card also offers a 0% APR introductory rate on balance transfers and purchases. This card was a Consumer Reports rewards card pick.
2. 12 Month 0 Balance Transfer Citi Premium Select
At up to 12-months, the Citi Premium Select offers one of the longest balance transfer offer currently available. It’s regular APR is competitive, and it comes with no annual fee.
3. Blue Cash from American Express
Blue Cash is another Consumer Reports pick. The card offers up to 5% cash back, no annual fee, and 0% interest on purchases for up to 12 months.
Remember not to overspend
As rewarding as some credit cards can be, we must resist the temptation to overspend. Studies have shown that some people buy more with credit cards than they would with cash. Particularly with cash back cards, care should be taken not to buy more than you need. No matter how good the credit card deal is, you still have to pay back what you spend. So while these cards can save you money during the holidays, we still have to use them with care.
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