Credit cards are by far the best way to pay for any gift you purchase during the holidays. Chase and Discover stand out with rewards and bonus offers on cards that also offer price protection for the full holiday season, as well as purchase protection to protect your purchases against damage or theft well into the New Year.

Here's why these two card issuers stand out from the rest for holiday shopping.

Got price protection?

Have you ever purchased something only to see the exact same product advertised at a lower price later? It's a really frustrating experience, especially if the price difference is substantial.

Luckily, diligent shoppers can get a refund for the difference in price when a product they purchase is advertised at a lower price later. Thus, if you buy a new TV for $500, only to see it advertised for $300 a week later, you can make a price protection claim and get a check for the $200 difference.

Discover cards are the best for price protection. All Discover cards offer price protection to their cardholders, with a maximum claim of $500 per purchase, up to $2,500 per year. Furthermore, its cards have a best-in-class price protection period of 90 days and generous terms that allow you to make a claim even for limited-quantity sales, which includes Black Friday or Cyber Monday specials.

As one blogger reports, the ability to use price protection to match Black Friday or Cyber Monday deals is a huge perk of being a Discover cardholder:

About two weeks before Black Friday, I bought a TV from Best Buy for $499, because I knew it would be $199 on Black Friday. I submitted the claim for the TV about 5 days before the sale and was approved in 8 days. I received the check in 3 weeks.

Of course, most credit cards from well-known issuers offer some type of price protection, but it pays to read the fine print carefully. Most only offer it for 60 days, and do not allow you to match prices based on limited-quantity or "door buster" sales events. Discover gets the edge for offering 90 days of protection and for matching prices from special or limited quantity sales.

Up close picture of a gold credit card

Image source: Getty Images.

How about purchase protection?

When a product you purchase is damaged or stolen, purchase protection refunds the purchase amount, or pays for repairs, usually up to $500 per purchase. Thus, if you buy a new tablet and break the screen shortly thereafter, the purchase protection feature will pay to replace or repair it.

The fine print on purchase protection plans can vary by network and card issuer, but the best terms can often be found on Chase cards. The Chase Freedom Unlimited® and Chase Sapphire Preferred®, two cards that score highly in Fool.com's rankings of the best cash back and travel rewards cards, respectively, offer 120 days of purchase protection, paying out up to $500 per purchase and $2,500 per year.

By contrast, Discover, which offers the most generous price protection coverage, only offers 90 days of purchase protection. Thus, there is a bit of a give-and-take between getting the best price protection against a price drop or the best purchase protection if something you buy is damaged or stolen, something to consider when deciding which card to use for your purchases.

The all-around best cards for the holidays

Want price protection to ensure you always get the lowest price on your holiday purchases? A Discover card is probably the best choice. For purchase protection, which protects your purchases from damage or theft, Chase cards offer the lengthiest period against damaged or stolen goods.

With this in mind, I constructed the table below to show you some other perks of signing up for a new Chase or Discover card for this holiday season.

Card

New Cardholder Bonus

Additional Perks

Annual Fee

Chase Sapphire Preferred®

50,000 points ($625 of travel value) when you spend $4,000 in the first three months after account opening

Points can be transferred to a long list of travel partners, including major airlines and hotel chains.

$95, waived in the first year

Chase Freedom Unlimited®

$150 bonus when you spend $500 in the first three months after account opening

0% intro APR for 15 billing cycles on purchases and balance transfers

None

Discover it®-Cashback Match™

Matches all cash back earned in the first year, effectively doubling the rewards.

0% intro APR for 14 billing cycles on purchases and balance transfers

None

Discover it® Miles

Matches all miles earned in the first year, effectively doubling the rewards.

0% intro APR for 14 billing cycles on purchases

None

Data source: Card issuers.

Of course, there are other benefits to paying for purchases with a credit card. Credit cards are safer than debit cards if your information gets in the wrong hands, and many cards have rewards programs that help you accumulate points, miles or cash-back rewards, benefits you don't get by paying with cash or debit.

That said, credit cards shouldn't be used as a way to buy things you couldn't otherwise afford. The cost of interest on a balance can easily exceed the financial benefits of credit card rewards programs and other perks like price and purchase protection. As long as you always pay the statement balance by the due date, you'll get all the benefits of using a credit card without any of the costs.

 

Jordan Wathen has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.