5 Credit Card Tips To Help You Prepare for Holiday Spending Now
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Written by
Andrew Lisa
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Edited by
Cory Dudak
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Reviewed by
Jasmin Baron
It might feel like the expensive winter holiday season is still far away, but what you do now could determine whether you enter 2026 with your finances in shape, or start the new year strapped with debt and money stress.
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The following five credit card tips can help you prepare for year-end rituals of shopping, spending and splurging so you can save money, maximize rewards, avoid interest and revel responsibly.
Reduce Debt Now
According to Experian, unlike simple interest, which is calculated only on the principal amount, compound interest is calculated on the principal plus accumulated interest. The next calculation is based on that larger amount, as is the next (and the next after that, and so on).
Since credit card interest compounds daily, relatively small balances can quickly lead to big bills, and that’s no way to enter the season of swiping, inserting and tapping.
If you have existing credit card debt, abstain from charging purchases until you’re able to pay your statement balances in full, at which point you’ll stop paying finance charges and be ready to spend — and maybe even splurge — when the holidays arrive.
That, of course, is easier said than done, so consider measures like:
- An intense, but temporary, period of austerity — eliminating wants like dining out, unnecessary purchases and streaming services to contribute every possible dollar to debt reduction.
- Converting accumulated credit card rewards to statement credits to pay down outstanding balances.
- Applying for a personal loan or balance transfer credit card to consolidate debt and lower interest.
Strategize Accordingly (BNPL Is No Longer Invisible)
On June 23, FICO — used by 90% of top lenders — announced a major change in how it calculates credit scores. To “better reflect modern consumer behavior,” FICO scores will soon include data from buy now, pay later (BNPL) transactions, which they rarely had in the past.
Last winter, you could stretch out purchases into BNPL installment loans without it affecting your credit (other than in the rarest of cases). This holiday season, however, lenders and credit card companies will know about — and therefore consider — this sometimes useful, but often risky payment option that enables some users to spend beyond their means.
Open a Travel Card To Save Money on a Winter Trip
Roughly 119 million Americans traveled during the 2024-25 holiday season, according to AAA. If your winter plans include planes, trains, hotels and rental cars, a travel credit card could save you money, earn you upgrades and offer rich rewards that can be even more generous when redeemed through the card issuer’s travel portal.
Some are free, many have annual fees in the $100 range and top-tier offerings charge in the high triple digits. It’s a get-what-you-pay-for decision, with the costliest cards offering the most premium rewards, including airport lounge access, luxury room upgrades and sign-up bonuses worth thousands.
Airline-specific cards can be a good choice for loyalists to a specific carrier, while general-use travel cards offer more flexibility.
Rack Up Cash Back To Cover Your Holiday Budget
The National Retail Federation estimated the average American spent $902 on the winter holidays in 2024, including food, gifts, decorations and other seasonal items — and the right cash-back credit card could cover that expenditure with some money left over.
Most recent Bureau of Labor Statistics data showed average households spend $77,280 per year. Most people can’t put everything they purchase on a credit card, but even if the average household charged $50,000 of its annual expenses to a flat-rate 2% cash-back card, they’d have $1,000 at the end of the year. Those willing to do a little more legwork can earn up to 6% from rotating category cards or those with special spending bonuses.
Usage Tip: Instead of letting cash back rewards sit idle in your card’s rewards account, redeem and transfer them to a holiday-specific savings bucket where they can earn interest.
Work Your Card’s Third-Party Offers Like You Work Its Rewards
Many cards include brand-specific offers, which can be more lucrative than the points, miles and cash back in their primary rewards structure — and many cardholders underutilize them, especially around the holidays when they’re most useful.
There are often dozens (or even hundreds) of options, which change periodically and have expiration dates. They typically include household name brands that sell everything from sunglasses and streaming media to flower delivery and hotel rooms – any of which might already be on your holiday list.
Discounts are applied as statement credits that directly lower your credit card bills on a dollar-for-dollar basis, and can typically be used in conjunction with any deals or sales offered by the manufacturer or retailer from whom you make the purchase.
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