Ask Brad: Credit Cards For Holiday Gifts?

By: Brad Wilson, National Lifestyle Content Desk

In this week’s Q&A, Brad Wilson from Brad’s Deals answers questions on how holiday shoppers can cross off their lists without overspending — and tips for using credit cards wisely.

Q: How can shoppers avoid going over budget this season?

Brad: Santa shouldn’t be the only one with a list. Tracking what you plan to buy will help keep you focused on what matters to you, and help you avoid buyer’s remorse. Retailers really try to tap into your sense of FOMO (Fear of Missing Out) to encourage you to spend more. 

Now, having a list is all well and good, but what if you see a deal that is really too good to pass up? I like to take a few things into consideration. First off, is the deal what I think of as “free money”? Free money means that I am going to come out net positive after the deal. On Prime Day, for example, Amazon had a deal where if you spent $40 on Amazon gift cards, you got a $10 credit in your account.

Another thing to think about is if it is something consumable, and that you always need. Even if they weren’t part of your plan, if the deal is right, take advantage of it. I also consider how the item will impact my budget overall, and if I am willing to give something else up for it. I also think it is fair game to build a little flexibility into my budget. That way, if I see something I want, I can still get it, but I’ve also given myself a reasonable limit.

Q: Do you recommend using credit cards to pay for holiday gifts?

Brad: Yes, I recommend using credit cards to pay for holiday gifts (and any other purchase that doesn’t incur a fee for doing so). There are several reasons for this- one, you earn rewards for spending on most credit cards. I recommend the Chase Freedom Unlimited this year, since it earns 1.5% cash back on every purchase, in addition to other spending category bonuses. Two, you are protected in case something goes wrong with the purchase- if the merchant fails to deliver you your purchase, for instance, you have an avenue for getting your money back. Three, if your item breaks after purchase, many cards offer purchase protection to get you your money back, sometimes months after you bought your item.

Q: What type of credit card incentives are out there?

Brad: The biggest incentives are sign up bonuses, which can deliver a serious return on your spending this holiday season. The Chase Freedom Flex card offers $200 back on your first $500 spent on the card. You’ll also get 5% cash back on PayPal and Walmart purchases until the end of the year. If you’re going to be spending a lot on groceries due to holidays, consider a card that returns 4 points per dollar on grocery spending, like the American Express Gold card. Remember, pay your bills off every month in order to make these rewards truly rewarding- payments on interest fees can add up and create more stress than the rewards are worth.

Q: What about layaway or other programs?

Brad: I’ll be honest, layaway is not my favorite holiday shopping tradition. The best consumer move is to leverage credit cards to earn cash back or points. However, I also understand that there are situations where layaway is the only option. If that is the case, look for stores with layaway plans that don’t charge a fee for opening a layaway account, and also, make sure you are aware of any fees associated with canceling your layaway order.

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