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The Right Credit Card Could Be Your Bank Account's Biggest Ally this Holiday Season

By Guest Blogger(view all posts by Odysseas.Papadimitriou)
at 7:49AM Tuesday November 20, 2012
under Holidays

If you're like most people, all you want for Christmas is some savings.  Forget your two front teeth or Mariah Carey singing about wanting "you," the average consumer is expected to spend $838 this holiday season, according to Discover's Annual Holiday Shopping Survey, and it's important to soften the impact on your bank account. 

The question is how.

There are a number of tried-and-true holiday savings methods, including taking advantage of sales on Black Friday and Cyber Monday, selling unused gift cards for cash, and doing some comparison shopping online.  Another effective, yet perhaps surprising means of saving is to simply use the right credit card.

While a lot of folks only know credit cards as a quick way of getting into debt, the right offer could actually save you hundreds of dollars via rewards or low interest rates if used responsibly.  You just need a card that suits your spending and payment habits as well as the above-average credit it takes to qualify for a truly lucrative offer, as you'll see below.

Need:  A quick few hundred bucks
Details:  When you open this card and charge at least $3,000 within three months, Chase will give you 40,000 bonus points redeemable for $500 in travel or a $400 statement credit.  The fact that it doesn't charge a first-year annual fee ($95 thereafter) means you can use your holiday shopping to help you meet the aforementioned initial spending requirement, replenish your bank account a few months down the road, and then get out of dodge before you have to pay more than you would ordinarily.

Need:  Rewards tailored to your lifestyle
Details:  The Blue Cash Preferred Amex offers 6% at supermarkets purchases (up to a $6,000 limit each year), 3% cash back at department stores and gas stations, and 1% cash back on everything else.  You can therefore use it to save on holiday cooking, travel, and gift giving as well as some of your biggest expenses throughout the rest of the year.  While it does charge a $75 annual fee, spending $1,000 during the first three months will get you a $150 rewards bonus.

Need:  The ability to avoid interest on upcoming purchases
Details:  Holiday shopping debt can easily linger in your account through New Year's, which can end up costing you a lot in interest.  By planning ahead and using the Diamond Preferred Card, you'll give yourself a year and a half to pay off what you owe before interest even begins to accrue.  It doesn't charge an annual fee either.

Need:  Less expensive debt
Details:  If you want to use a rewards card to make your holiday purchases but won't be able to pay off your total balance within a single billing period, you can prevent interest from eating away at your savings by transferring your balance to the Slate Card from Chase.  It offers 0% on balance transfers for 15 months and does not have balance transfer or annual fees.

Need:  Savings at a particular store
Best Card:  JCPenney Store Card
Details:  Store cards are credit cards that can only be used at the particular retailer with which they're affiliated.  They typically offer attractive initial discounts and are easier to get approved for than traditional credit cards.  The JCPenney Card is a great option because it scores you 10-20% off whatever you buy the day you're approved and you can tackle the majority of your holiday shopping at JCPenney.

At the end of the day, Santa has elves to help him get through the holidays, and you have the right credit card(s).  Use it wisely, and you can enjoy the holiday cheer rather than being stuck with holiday spending fear.

This article comes from our friends at Card Hub, a leading website that helps consumers find the right credit cards for their needs and operates the nation's largest gift card exchange.