Due to the possibility of excessive spending, many financial experts recommend foregoing the use of credit cards for holiday spending.
Credit Cards and Holiday Shopping
While over-spending can be a problem, there are several reasons to consider this form of payment for gift buying purposes.
Take Advantage of Rewards
Many credit cards offer a variety of bonuses and rewards for your purchases, especially during the holiday season. These reward programs typically involve earning points or cash back based on how much you spend.
Choosing to use a credit card for your holiday purchases has the potential to give you that little bit extra you may need for the perfect gift. A great example is Discover Card. I plan to use the money I have earned in rewards towards restaurant gift cards. In most cases, $45 in reward money will get you a $50 gift card so that is a great bonus.
Stay Safe From Fraud
Both credit and debit cards offer protection against fraudulent or unauthorized charges. However, credit cards are better able to keep your funds safe, in the case of theft. While fraudulent debit card purchases take funds from your account immediately, credit card charges that aren’t authorized can be contested before your funds are actually debited.
I had someone purchasing items from India on one of my cards. Luckily my credit card company thought it was strange and contacted me. We were able to close my account and get a new card. I was not liable for the $500 the person had charged.
Protect Yourself Online
It’s no secret that the online shopping business is booming. It’s truly one of the most convenient ways to purchase holiday gifts. But, it’s not fool-proof. There’s always the chance of receiving the wrong or damaged products. Even worse, you may not get the item or at all. That’s where credit card protection steps in.
Depending on the seller’s return policy, it is often difficult to get a refund using your debit card. On the other hand, all credit card purchases are protected by the Fair Credit Billing Act. The act protects buyers who use a credit card and don’t get the product they were promised. When this happens, many credit card issuers offer temporary credit until the issue is resolved.
Earn Extended Warranty Protection
Many expensive gifts (especially electronic devices) include an option to pay for a manufacturer’s warranty in case the item is damaged or broken.
Why pay, if you don’t have to?
Your credit card may offer its own extended warranty, at no cost, as long as you pay using the card. Typically, these extended warranties offer as much as one year of coverage after the original warranty expires.
Potential Price Protection
Finding a lower price on the gifts you just purchased can be more than a little bit frustrating. Fortunately, some credit card providers offer a price protection program in which they refund you the difference in price.
You generally need a receipt of the original purchase, in addition to a sale ad or other proof of the reduced price. There may be a time limit in regard to how long you have to make price the protection claim. So, make sure you are familiar with the policies of your credit card company.
There you have it, five plausible reasons to at least consider using a credit card for holiday shopping. Doing so offers buyers an added level of protection in the event of fraud, product damage, etc.
Stay Within Your Budget
To reduce the possibility of spending more than you can afford, try this. Make a shopping budget, which includes an individual spending limit for each person on your list. If you stick to it, you probably won’t go over budget. However, you’ll still be privy to the protection credit cards provide.
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