11/30/2011 10:06 AM ET|
3 reasons to charge it this holiday
Credit cards can tempt you to overspend, no question. But the right cards, used the right ways, can also help you stretch your buying power.
Sure, hiding your credit card is one way to protect yourself from holiday debt, but a consumer with a solid credit history shouldn't necessarily put away the plastic until January. In fact, there are reasons that a credit card should be your payment method of choice this holiday shopping season. MainStreet looks at the ways your credit cards can help you save on gifts this year.
You can earn big rewards
Credit cards generally offer consumers anywhere from 1% to 5% cash back on purchases, and rewards programs have gotten much more lucrative. Popular rewards cards with no annual fees, like the Chase Freedom and the Discover More Card, are offering 5% back on all department store purchases made through December. (Are your credit cards crummy? Find a better card.)
Savvy shoppers can also net even higher cash-back rewards when shopping at their issuer's online shopping mall. Upromise, for instance, is currently offering its Upromise World Class Master Card cardholders up to 21% cash back on purchases made at the online mall through Dec. 31.
"Bonus-point malls actually earn credit card companies a percentage of their sales," Tim Chen, the CEO of the credit-card ranking site NerdWallet, told MainStreet back in February. "This is why during peak periods, such as Christmas or Valentine's days, issuers get competitive and offer some of their best deals."
Rewards can be used toward online purchases
Earning rewards isn't the only thing that's easier around the holidays. Cardholders can apply points toward purchases made in these online malls as well.
Additionally, this year Discover has partnered with Amazon.com to let its customers pay for purchases using their reward points seamlessly at checkout. As part of the promotion, the company is also letting cardholders earn double cash rewards on Amazon purchases of up to $250 each month through the end of the year.
American Express cardholders can also pay for purchases on Amazon with their rewards points, a partnership that started in 2010.
You can qualify for special sales, extra discounts and other perks
Those who have store charge cards should be on the lookout for special sales hosted by the retailer that let them put that plastic to good use.
Macy's, for instance, hosts an annual "friends and family" sale one weekend each December that entitles cardholders to 20% off on almost all store merchandise when they use either a Macy's charge card or branded credit card. The cards also let consumers return purchases without a receipt and score additional deals and discounts throughout the year. The Toys R Us store card also gives cardholders access to special offers and discounts.
But don't go shopping for store credit if your score can't afford it, as each inquiry can shave three to 15 points off your credit score.
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I'm disappointed in this article, because nobody stops to think about the huge downside of swiping plastic at business. All of those rewards you receive are paid for by the business. I own very small business (a coffee shop), and upwards of 5% total of all card use (debit and credit) walks right out the door and into the hands of V/M. That's over 2% of my gross. I could hire a person on the amount that goes into oblivion.
Having researched this quite a bit I know that billions of dollars leave American communities and head straight for the V/M Gods....that's a lot of jobs. We have the by American Christmas campaign happening, in which it's stated that if you spend just $64 of the average American's $704 on a made in America gift it could create 20,000 jobs. I have done the math and if we also stop into our banks and make a face to face withdrawal for $100 that you would have otherwise put on a card and make an extra purchase this way, we could create another 10k jobs (assuming that each job costs 101,000 a year - pretty generous).
All we need is some conscious spending habits. How can we not see that these frivolous notions that credit cards are good are damaging our spending habits?
They make it pretty clear in the article that you should only do this if you have the money. Just because you use a credit card to purchase something doesn't mean your going into debt by doing it. If you pay it off at the end of the month, it was the same as using cash...and I have points to show for it...and a statement that I can use to track exactly where my money went.
I hear you about the small businesses having to pay for the credit card fees, but all businesses have to pay for credit card fees, it is nothing new, customers want the choice, and is part of the cost of doing business. The overhead for your store is added into your prices (electricity, water, security, etc), why shouldn't the credit card fees? I bet you could employee another person by dropping any of the overhead costs, doesn't mean it makes sense to do so.
Ah, but credit and debit card fees are the only expense that could disappear while still giving your customer the same goods and quality. As a consumer and a business owner it is so easy to get and pay with cash, why not keep those dollars in our communities? Whether it's on lower prices for goods because of lowered expenses, or the fact that businesses will have more $ for employees, etc.
Using plastic pretty much just diminishes the value of the dollar spent. When you pay with cash a dollar is a dollar.
Just to clear up a point in my last comment. I said Credit cards are hard to pay off.
I know a lot of people are able to pay off balances at the end of the month but what about those emergency auto repairs? Medical bills that you're required to pay an initial amount? Something might come up that requires you to have to purchase more than you're able to afford at the end of the month.
There is also another danger. A lot of people think they can pay it off at the end of the month, they over charge and can't because they don't have the discipline to do it. Eventually getting into a situation of having to pay minimums, which isn't going to pay down your balance anytime soon. The average American has about $12,000 credit card debt that they are having to pay on forever and they don't see any light at the end of their tunnel with the nickel and diming they have to go through just to pay on those credit cards.
It's just best to never mess with the credit cards, they are a trap that will sneak up on you.
my wife tried to buy a new card with her credit card and they would only let her pay up to $500 on the card and the rest by check or cash. But I agree, try to pay everything you can by credit card (NOT DEBIT CARDS) due to the perks we receive by being responsible spenders.
Don't believe it. Unless you can pay off your credit card at the end of the month, then the answer is BS.
Credit cards are hard to pay off. You have to call and pay it off over the phone to get rid of it completely because the interest accumulates daily. If you pay it off my mailing in your statement to arrive on time and think you have it paid off. Guess what? There's interest added on while your payment is in the mail. You think you're paid off, you might ignore the next statement that comes in thinking "nothing to worry about, probably to tell me my balance is 0." Then you get hit with a later charge.
Pretty much anything to do with credit cards, they are all crooks. They even changed the deadline for payment from Midnight to Noon a few years ago so more people will be late and they can collect more late charges. The representatives sounds like they are trying to do their part to help you avoid late charges and they probably are however the majority of money made by credit card companies comes from the Late fees they collect. They love collecting late fees, to them it's like getting something for nothing.
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