Charging Holiday Purchases? You May Want to Look for a New Credit Card

Don't charge any of your holiday purchases without reading this.

The holiday season is fast approaching and it typically comes with a lot of expenses. If you're going to be charging any items you're buying for the festive season, it may be a great idea to look for a new credit card first.

There's three primary reasons why signing up for a new card could make sense before you begin your holiday shopping. 

1. You can maximize your rewards

One of the best reasons to get a new credit card before the holidays is to ensure you're earning the maximum rewards points for your purchases.

You can make your shopping list to see where you'll be spending most of your money for holiday gifts and entertaining expenses. Then, you can make sure you pick a rewards card that's going to give you bonus cash back, points, or miles for these types of purchases if your current card doesn't already do that.

If you can earn the maximum amount of rewards for all of the holiday items you buy, this will effectively mean you're spending less on gifts since you're getting more back. 

2. You can earn sign-up bonuses

Many credit cards offer generous sign-up bonuses, but you're required to meet certain spending requirements to get them. For example, you might get extra bonus airline miles if you spend $1,000 within the first three months of signing up for a credit card.

Sometimes, it can be hard to meet the requirements necessary to get these sign-up bonuses if you don't charge a lot on your credit cards. But the extra spending most people tend to do around the holiday season could potentially be enough to push you over the edge and make earning the extra rewards easy. 

If you're going to be spending a lot of money anyway, you may as well try to get some extra bonus rewards or cash for doing so. 

3. You can get a low APR

Ideally, if you are charging holiday gifts, you will have enough money in your bank account to pay for everything you purchased without owing interest charges. If you can pay your balance in full when the statement comes, you can reap the benefits of the rewards and sign-up bonus without ending up losing most or all of that money back to creditors in the form of future interest costs. 

But, there may be times when you don't have quite enough money saved to pay for everything you need to buy over the holiday season. If this is your situation, you should try to find ways to cover the costs -- or cut expenses -- without borrowing. However, if you can’t and you have things you really need despite not having savings for them (such as presents to put under the tree for your kids), then getting a new credit card could be helpful. 

In this situation, you could apply for a 0% APR credit card which would allow you to pay no interest on purchases for a certain time after you open the card. If you make a plan in your budget to pay off your card in full before interest kicks in, you'll avoid making your holiday gifts more expensive.

For all of these key reasons, looking for a new credit card for holiday shopping could really pay off. Consider today whether any of these benefits are enough to convince you to apply for a new card.