With the holiday shopping season in full swing, you may be finding yourself reaching for your credit cards to pay for gifts, travel and entertaining. If you’re wondering whether that’s a good or bad thing, let’s look at the pros and cons of using credit cards for holiday shopping.

THE PROS

Earning Rewards

Depending on which credit cards you have, you can use them to strategically earn points, miles or cash back for your holiday purchases. Consider your plans for 2022 and use cards that will help you reach those goals. For example, if you have a big trip planned in the new year, use a card that earns travel miles and use those miles to help pay for your trip.

More Secure Shopping

If you’re doing the bulk of your holiday shopping online, you’ll definitely want to pay with a credit card rather than a debit card. While both offer protection from fraudulent charges, if your debit card number is compromised, it can take up to a few weeks for the bank to work out the issues, leaving you with an empty bank account when you need it the most.

Discounts and Promotions

Using credit cards issued by specific stores or brands is a great way to get additional discounts, gifts with purchase or cardholder perks. But be careful; opening more than one or two store credit cards in quick succession can cause your credit score to take a hit. It’s best only to use these cards if you already have them, rather than opening them just to do holiday shopping.

Purchase Protection

Many major credit cards offer purchase protection in case an item is damaged or stolen. If you’re purchasing a big-ticket item such as a holiday gift, check with the card issuer before the purchase to clarify their protection plan and the requirements to file a claim. The purchase protection on certain credit cards can provide peace of mind for your holiday purchases.

THE CONS

Spending More Than You Planned

Even if you’ve planned a gift budget, using credit cards to purchase gifts can lead you to spend more than you planned. Be disciplined and stick to your spending limits to stay within your budget so you can pay off the purchases quickly.

Security Risks

Unfortunately, data breaches that leave your personal and credit card information vulnerable are now a common occurrence. Whether you’re using credit cards for holiday purchases online or in-store, keep a close eye on your account activity to quickly uncover any unauthorized purchases or unusual activity. If you suspect something is amiss, contact the credit card company right away.

Lingering Debt

Ideally, you’ll be able to pay off your holiday credit card purchases before interest begins to accrue. It not, any savings, perks or bonuses you received could be quickly wiped out by interest charges. If you can’t pay right away, rework your budget to allow more money to go toward paying off the holiday debt. If you think you might be in over your head with credit card debt from holiday spending, talking to a credit counselor or completing online credit counseling can help you formulate a plan to tackle it.