Ok - Christmas and the holiday season is coming. Here are my personal holiday credit card tips for the festive season.

Use up any points that are about to expire

Yes, if you have a reward credit card that you have not used for a while, chances are that you may still have some reward points that are unused. Make sure you check when they expire and use them during the holiday season.

Use points for merchandise or gift cards

Chances are that it will be very difficult to use reward points for airline tickets during the peak season. Hence, it is probably best to redeem them for merchandise or gift cards.

Take advantage of offers from reward programs

As with all merchants, credit card reward programs offer discounts and special deals during the festive season. They usually come in the form of special items, less points requirements or special discounts when you shop through the credit card reward program’s site. For example, American Express has shopamex.com, Discover has shopdiscover.com. These programs will offer special deals throughout the festive season.

Budget and don’t overspend

Do you rack up more credit card debt than you should and get a January overhang? The key to avoid impulse purchase is to actually budget and do most of your shopping early. Last minute shopping often leads to overspending! By budgeting and doing your shopping early, you also give yourself time to search for the best deals (whether offline or online).

Ask for a lower APR

If you do have to carry a higher balance in the next couple of months, then give your credit card issuer a call and ask them to give you a lower rate. If you have been paying on time and your credit score is good, there is a decent chance they will agree to your request. This obviously would not work if you have not used that credit card for a while or have a record of missing payments!

Get a 0% APR credit card for purchase

Once again, if you really have to carry a higher balance over the Christmas season, you should try to get a credit card that offers a 0% APR deal for purchases. Search for the deals with the longest introductory period. If you have very good credit, then Blue from American Express may even give you a 0% deal for as long as 15 months.

Don’t fall for 0% financing traps

It’s one thing to budget, plan what you spend and make use of 0% APR deals. It is another to spend money on an item simply because it comes with 0% financing. Yes, how many ads have we seem from Lowes! and other retailers who offer some form of 0% financing when you make a big ticket purchase. Buy something because you really need it and not because of zero percent financing. Fall into these traps and offers and you will definitely feel the January hangover.

Don’t apply for cards simply for trivial discounts and bonus offers

Shop at GAP or any well known retailer and chances are that when you check out, you will be asked if you want to apply for their store credit card. “With this card, you will get a 5% discount whenever you shop here” will be the standard sales pitch. If you do the math carefully, chances are that you will hardly spend enough to make that discount worthwhile. Furthermore, if you respond to every offer, you’ll soon be carrying a bunch of retail store credit cards and have the fattest wallet!

With that, I would like to ask you to share your other holiday credit card tips with us.

This entry was posted on Sunday, November 18th, 2007 at 4:44 am and is filed under Tips and Advice. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.