Three Ways Your Credit Card Can Help with Your Holiday Shopping List
No, your credit card can’t go to the mall or wrap presents for you, but it can do a few other handy things.
The holiday season is big business. For many retailers, November to December is the busiest time of the year. It is also a busy season for consumers who make extra purchases that can exceed $1,000 or more.
According to Discover Financial Services, credit cards are the most popular choice to pay for holiday purchases. Consumers prefer credit cards 32 percent of the time, debit cards 29 percent of the time and cash 23 percent of the time.
While there are good reasons to pick cash and debit cards, there are three reasons why credit cards are the preferred choice for holiday shopping. The holiday season is big business. For many retailers, November to December is the busiest time of the year. It is also a busy season for consumers who make extra purchases that can exceed $1,000 or more.
Use a credit card for your holiday shopping to buy now, pay later. Perhaps the best reason is that you are buying on “credit” so you don’t need to take the money out of the bank to pay the merchant right away. Depending on what time of the month you make your purchase, you could be waiting up to 50 days before having to pay for your purchase. If you pay your balance off in full each month, you don’t pay any interest.
Use a credit card for your holiday shopping to fight fraud. Another big advantage is that if your credit card is used without your permission, and if you report the loss as soon as find out, the fraudulent purchase is removed from your balance. Your protection against fraud with your debit card can take more time and it will be longer before the stolen funds are returned to your checking account. Of course, if you lose cash there is no way to recover that.
Use a credit card for your holiday shopping to earn benefits. If you have a Zions Bank credit card, there are additional reasons to favor a credit card to buy that WooWee Fingerlings, or Big Hugs Elmo, or a fruitcake (or not). With thousands of different credit cards to pick from, Zions Bank wants to make sure that you have some great benefits for choosing ours.
- AmaZing Cash Back – Earn cash back with each purchase. There is no limit to what you can earn and no expiration date.
- AmaZing Rewards – Earn points from everyday purchases that you can use for other purchases. Unlike many other cards, there are no blackout dates or travel restrictions. Because your points never expire, you can save them up to use whenever you are ready.
- AmaZing Rate – With this card you get a low interest rate, so more of your payment goes to paying off your purchases and less to interest.
- AmaZing Cash Back Deals – With this card you can get a lot more back than the 1 percent offered by many credit cards. How does 50 percent sound? Zions Bank has teamed up with hundreds of participating Utah and Idaho retail stores, restaurants, automotive shops, health and beauty providers and many more local vendors. They are willing to give you a discount ranging up to 50 percent just to get your business. You can also take advantage of discounts from online retailers and online travel service providers.
With these three great reasons to use credit cards, there is one big reason to decide not to use a credit card for your holiday shopping. While many people make it a habit to pay off their credit cards in full each month and thereby avoid paying any interest, other people don’t. Among those who don’t pay off their balance each month, they carry an average balance of over $15,000. That means that if they are not paying down their balance with extra payments, they are paying up to $3,000 or more in interest each year. Who would rather have $3,000 to spend on Christmas than use it to pay interest?
How can you decide if the benefits of using a credit card outweigh the risks? It’s kind of like asking should you drive a car? Most people can handle driving just fine, but some people should leave the driving to others. If you make sure you pay off your credit card each month you can not only save money, but you can make money. That’s a win-win.
Don Milne is Financial Literacy Manager for Zions Bank.