Credit Card Tips for the Holidays

Recession or not, Americans are out hunting for great deals on Christmas presents — and while they’re relying less on plastic, that doesn’t mean they’re not using their credit cards.

According to the National Retail Foundation, the average holiday shopper will spend $683 on gifts this year. Credit card spending will be down, but not out. Nielson Research says that 42% of Americans will cut spending this holiday season, and will rely less and less on credit cards for the gifts they do buy. The company says that over half of Americans will use their credit cards in December.

If you plan on using your credit card for the holidays, there are some rules to live by before you take the plastic from your purse or wallet.

Let’s have a look-see.

Avoid the store cards. We’ve all been there. The clerk at the check-out counter will inevitably ask you to open a store credit card and get 15% or 20% off of your purchase. The best advice? Take a pass. Invariably, store credit cards come with zero percent or low-rate introductory offers. But if you miss even one payment, that rate will shoot up and haunt your for moths, if not years. Better to pay cash or use a signature credit card.

Leverage those “return” policies. Many major credit cards will offer you return protection — meaning the card carrier will guarantee your purchase, usually up to 90 days after you buy your gift. Make sure you know what your card company’s policy is — and ask about their return policy. Three months is good protection for purchases that need to be returned — it’s much better than what retailers offer.