NerdWallet’s Best Credit Card Tips for December 2019

Melissa LambarenaDecember 4, 2019
On a similar note...
On a similar note...
NerdWallet’s Best Credit Card Tips for December 2019

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December brings all the holiday feels and deals that can trigger emotional spending. After all, it's about putting smiles on your loved ones' faces — even if a certain red-suited, chimney-shimmying individual gets all the credit.

However you celebrate the holidays, the pressure is on to be thoughtful and generous whether you’re buying gifts for every night of Hanukkah or one day out of the year. But if you're not careful, all that holiday spending can easily hijack your credit card and jump-start a debt cycle that lingers into the new year.

As you unwrap those holiday offers and promotions, consider these credit card tips to help you "sleigh" the holidays.

1. Shop (and redeem) strategically

Get paid for spending you're going to do anyway

On average, holiday shoppers anticipate charging $660 of their gifts to their credit card with an estimate of paying off the balance in 3.7 months, according to NerdWallet’s 2019 Holiday Shopping report. A rewards credit card, if you have one, can make your holiday budget go further.

For instance, if you're doing a lot of shopping at Walmart this season, the Capital One® Walmart Rewards™ Mastercard® can earn you 5% back on online and in-app purchases. And in the first year, that rate isn't limited only to virtual purchases. Earn 5% back on purchases in Walmart stores when you use this card in Walmart Pay for the first 12 months after approval. The card's annual fee is $0.

American Express Blue Cash Everyday Credit Card
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Or perhaps your biggest gift to others will be a holiday feast. Get a side of rewards with the Blue Cash Everyday® Card from American Express. It earns 3% back at U.S. supermarkets (on up to $6,000 per year in purchases, then 1%); 2% back at U.S. gas stations and at select U.S. department stores; and 1% back on other purchases. Terms apply. The annual fee is $0.

Take advantage of shopper-friendly 5%-back categories

Credit cards like the Discover it® Cash Back and the Chase Freedom® offer 5% cash back in rotating bonus categories on up to $1,500 in combined spending each quarter upon activation (1% back on everything else). Both cards happen to feature useful bonus shopping categories in the fourth quarter of 2019, and December is the final month to take advantage of them:

Current Chase Freedom® bonus categories

Chase Freedom® and Chase Freedom Flex℠* bonus rewards categories for 2020

Q1 (Jan. 1 - March 31)

• Gas stations. • Select streaming services. • Internet, cable and phone services.

Q2 (April 1 - June 30)

• Grocery stores. • Gym memberships and fitness clubs. • Select streaming services.

Q3 (July 1 – Sept. 30)

• Amazon.com. • Whole Foods Market.

Q4 (Oct. 1 – Dec. 31)

• Walmart. • PayPal.

*The Chase Freedom Flex℠ was introduced in mid-September 2020, so the first bonus categories that apply to the card for a full quarter are those for Q4.

Current bonus categories on Discover cards

Discover bonus rewards categories for 2020

Q1 (Jan. 1 – March 31)

• Grocery stores. • CVS. • Walgreens.

Q2 (April 1 – June 30)

• Gas stations. • Uber and Lyft. • Wholesale clubs. • June only: Home Depot.

Q3 (July 1 – Sept. 30)

• Restaurants. • PayPal.

Q4 (Oct. 1 – Dec. 31)

• Amazon.com. • Target.com. • Walmart.com.

Stack your earnings

A cash-back shopping website like Rakuten or BeFrugal can offer extra rewards on top of what you already earn with your credit card.

For example, say you've got a flat-rate credit card like the $0-annual-fee Citi® Double Cash Card – 18 month BT offer. It earns 2% cash back wherever you shop: 1% when you buy and 1% when you pay it back. But some cash-back websites advertise 10% back or more at specific retailers, meaning you could collect on both for a total of, say, 12% back on one purchase.

2. Prevent unwanted surprises

Understand deferred interest promotions

Beware of store credit cards advertising "special financing" or "no interest if paid in full" over a designated time frame. These are not true 0% intro APR offers, in which interest is fully waived for a period, but rather deferred interest offers, in which interest is merely set aside but still accruing in the background.

If you pay off the bill in full during the promotional period, no worries. But if you have any leftover balance when the promo ends — even a few cents — you'll be charged interest for the entire amount of the transaction, retroactive to the purchase date. Ouch.

Set up spending alerts

With everything else going on during the holidays, the last thing you want to worry about is a security breach. Opt in to credit card alerts so that you’re notified about purchases on your credit card. Also, review your credit card statement for unauthorized purchases.

3. Prep your credit cards for the new year

Rethink what's inside your wallet

If your current card doesn't fit your spending habits, check your credit score to determine whether you might qualify for better offers. You might not even need to apply for an entirely new card. It may be as simple as contacting your card issuer and requesting a product change, which can allow you to preserve the length of your credit history and your credit line. Or you can consider a downgrade with the issuer if you’re no longer willing to put up with an annual fee.

Craft your get-out-of-debt strategy

When you’re standing under the mistletoe with debt, some options can help you kiss it goodbye. A balance transfer credit card, for example, lets you transfer debt from a high-interest credit card to one with a lower annual percentage rate.

These cards typically charge balance transfer fees — 3% to 5% of the amount transferred — although it’s possible to find cards that don’t charge them. If your debt is due to circumstances beyond your control like job loss or an illness, you can ask your issuer about a credit card hardship program that can potentially lower your interest and waive fees.

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