Believe it or not, the holiday season is upon us once again. If you’re like many consumers, the next couple of months could get expensive as you participate in the festivities.
The National Retail Federation said the average shopper will spend just over $900 on gifts, food, décor and other holiday-related goods in 2024. According to a recent Experian survey, 41% aim to pay for their winter celebrations in cash to avoid incurring high interest charges. However, 59% said they plan to turn to a credit card to cover their merrymaking, with nearly three in 10 intending to use a store credit card at checkout.
Some store credit cards can only be used to shop at a specific retailer, while others can cover purchases wherever payment networks like Visa or Mastercard are accepted. Below, we’ll share the five best store credit cards for holiday shopping. That way, you can get rewarded for every tap, swipe, chip insert or online transaction.
[Read: Best Credit Cards.]
Best Overall: Prime Visa
If you plan to buy holiday gifts from the well-known online retailer, the Prime Visa may be a good addition to your physical and digital wallet. Here are some of the main perks:
— $200 Amazon gift card upon approval
— 5% back on Amazon.com, Whole Foods and Chase Travel purchases
— 2% back at gas stations, restaurants and on local transit
— 1% back on all other purchases
— No annual or foreign transaction fees (but it does require a Prime membership)
If you’re not already a Prime member but plan to spend quite a bit with Amazon for the holidays, consider the Amazon Visa Credit Card. You’ll pay no annual or Prime membership fee but still earn 3% back on Amazon.com, Whole Foods and Chase Travel purchases and the same rewards rate on everything else.
With either card, if you’d rather have more time to pay off your purchases without incurring interest, you can opt for a 0% promotional annual percentage rate instead of cash back. For example, you can get 12 months at 0% APR when you spend $250 or more. After the promo period, the APR is 19.99% to 28.74%.
Best for Big Box Store Shoppers: Target Circle Card
Target enthusiasts may want to consider opening a Target Circle Card (formerly Target REDCard) account. You’ll get 5% off all in-store and online transactions at the retailer. “Considering you can buy just about everything you need from this retail giant, from holiday gifts and gift wrap to groceries to household items, that 5% can go far in boosting your overall holiday budget,” says consumer and money-saving expert Andrea Woroch, a former U.S. News contributor.
Other notable benefits include:
— 2% back on dining and gas purchases
— 1% back on all other purchases
— Free two-day shipping on many items
— An extra 30 days to return products
As a cardholder, you’ll also get early access to Black Friday and Cyber Monday promotions, says Darla Bishop, author of “How to Afford Everything.”
Best for Wholesale Shoppers: BJ’s One+ Mastercard
If you like buying in bulk or shopping at wholesale clubs, the BJ’s One+ Mastercard could be right for your holiday spending.
Here are the highlights:
— 5% back on most BJ’s purchases (higher than Sam’s Club or Costco)
— 2% back on all other purchases
— 15 cents off per gallon at BJ’s gas pumps
— No annual fee
Your rewards never expire, and you can redeem them in the club, online or via the mobile app.
[Read: Best 0% APR Credit Cards.]
Best for Holiday Car Travel: Sam’s Club Mastercard
If you shop at Sam’s Club and are planning a holiday road trip, the Sam’s Club Mastercard is worth considering. You’ll earn 5% Sam’s Cash back at the pump on the first $6,000 you spend on gas, which you can use to buy more gifts or festive party food from the wholesaler.
Other cardholder perks include:
— 3% back on Sam’s Club purchases (if you’re a Plus member; otherwise 1%)
— 3% back on dining and takeout
— 1% back on all other purchases
You may earn as much as 5% back on Sam’s Club transactions if you’re a Plus member (2%) and use your Sam’s Club Mastercard (an additional 3%).
Best for Outdoor Decorations: MyLowe’s Rewards Credit Card
If you prefer making your outdoor space just as decorative as your indoor, then a MyLowe’s Rewards Credit Card might be a good choice. You’ll save 5% on all Lowe’s purchases and get 20% off your first purchase with the card (up to a $100 discount).
Beyond that, other card features include:
— Instead of saving 5%, you instead might qualify for six months of special financing or 84 months of fixed monthly payments
— No annual fee
[Read: Best Store Credit Cards.]
Tips for Using Your Credit Card This Holiday Season
Holiday shopping with a credit card can be rewarding but can also hurt your finances long term if you’re not careful. Here are three best practices to follow.
Choose the Right Card
Selecting a credit card should be a personalized, well-researched process. “The best store credit card for someone will depend on their shopping habits,” says Kathy Gilchrist, founder and chief financial officer at Cardinal Bookkeeping and Advisory. “It’s advantageous to get a credit card at a store you shop at often and where the card offers significant points or benefits.”
Benefits you may want to look for as a holiday shopper include a more lenient return policy, extended product warranties, theft or damage reimbursement, free shipping, early access to sales and steep discounts, says Woroch. A generous welcome bonus may also make a card extra appealing since buying gifts might make meeting a minimum spending requirement easier, adds Zac Hood, founder of the credit card rewards tracking app Travel Freely.
You may find that several cards align with your spending patterns and goals. However, you should avoid opening too many new accounts at one time. Doing so will result in multiple hard inquiries on your credit report, which could reduce your credit score. Plus, having increased purchasing power may tempt you to overspend and take on lasting debt.
Set a Strict Spending Limit
“Using credit cards creates less emotional pain in our hearts for spending the money. It can lead to us spending more than we planned,” says Matthew Pogirski, certified financial planner and owner of Unburdened Financial Planning. So, before you go to the store, open a browser tab or scroll through your favorite retailer’s mobile app, it’s wise to establish a firm budget to avoid overspending on gifts this holiday season.
“I encourage consumers to stick to their budget and only spend what they will pay off within the month,” adds Pogirski. “We don’t want the joy of your gift-giving to turn into pain for 2025 or beyond as we pay it off.”
Have a Plan to Pay Off Your Balance
Ideally, you can pay off your festive splurges in full each month to avoid racking up interest charges, says Bishop. But if that’s not possible, you need a strategy to shed your holiday debt. For instance, you may consolidate it with a lower-interest personal loan or reduce your post-holiday expenses and apply the newfound cash to your balance.
You also need to keep track of any 0% APR promotions you opt into as you shop. While they can help you save money, it’s critical to pay off your balance before each promotional period ends. Otherwise, the remaining debt will be subject to the card’s standard interest rate. Plus, if the deal you agreed to only defers the interest, the total interest you would have paid under a standard purchase will be added to the amount you owe.
More from U.S. News
Credit Utilization: What It Is and How It Affects Your Score
How to Read (and Understand) Your Credit Card Statement
7 Reasons Your Credit Card Was Declined — and What to Do About Each One
5 Best Store Credit Cards for Holiday Shopping originally appeared on usnews.com
Update 11/15/24: This story was previously published at an earlier date and has been updated with new information.
