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- I only ever use a credit card for my holiday purchases, whether they’re gifts, supplies, or travel.
- Credit cards offer rewards and protections you won’t get when you pay with a debit card or cash.
- You’re better protected against fraudulent charges when you use a credit card.
- Read Insider’s guide to the best credit cards for holiday shopping.
Friends and relatives sometimes raise an eyebrow at the multiple credit cards I have in my wallet, concerned that I might be damaging my credit score or sinking into debt by using them so often. I have an elevator speech for that: “Paying with cash or debit is like leaving money on the table,” I say, reminding them that earning points and miles from rewards credit cards is how my family gets to travel so much.
But there are other reasons to use credit cards for your spending that have nothing to do with earning rewards — especially during the holidays. Between buying expensive gifts, booking flights to visit family, and making payments for online purchases, there are lots of things that can go wrong.
Using a credit card instead of debit (or cash) for your holiday purchases can protect you if things go sideways. Card benefits like purchase protection can cover you if a new gadget gets broken, and if your flight is delayed you could be reimbursed for expenses if you paid with the right card. More importantly, credit cards come with zero fraud liability protection if someone racks up unauthorized charges — with a debit card, it can be incredibly difficult to get your money back.
Here’s why using a credit card for your holiday spending is a smart move.
Why you should use a credit card, not debit, for holiday spending
See Pay Over Time APR
60,000 points after you spend at least $4,000 in your first 6 months of account opening
Using a credit card for your holiday expenses is only a good idea if you treat it like a debit card — that is, only spend what you can afford to pay back. Unless you’re using a credit card with an introductory 0% APR, the interest you’ll pay from carrying a balance on your credit card will cancel out any rewards you’ll earn.
Credit card purchase protection and extended warranty
Many of the best rewards credit cards offer purchase protection that will reimburse you if an eligible item is damaged or stolen within a certain time period from the date of purchase. Depending on the card, you could be covered up to the entire value of the item, and the timeframe typically ranges from 90 to 120 days from the transaction date.
Purchase protection is particularly handy if you have small kids — nothing is more heartbreaking than an expensive new toy that gets broken in the excitement of gift opening! But whether you’re accident-prone or just have bad luck, this coverage gives you a bit of extra assurance in case things go awry with your purchase.
Some credit cards also offer extended warranty protection, usually extending the time period of a US manufacturer’s warranty by an additional year on eligible items. This perk can save you money, especially if you’d otherwise buy an expensive extended warranty from the retailer. Just be careful to read your card’s terms and conditions to make sure the item you’re purchasing isn’t excluded from this benefit.
If I’m buying a big-ticket item, I’ll normally use my American Express® Gold Card
or Chase Sapphire Reserve® for the purchase, because both cards come with excellent purchase and extended warranty protection.
Zero fraud liability with credit cards
With more and more of our transactions happening online, keeping yourself protected against fraud is even more important nowadays. A friend recently shared a horrible experience — she’d added her debit card online as her default payment method with a major retailer, and someone got into her account and charged over $600 in pickup purchases to her linked debit card. She’s still fighting with the bank to get her money back.
You don’t take the same kind of risk when you use a credit card. If your account is compromised and someone racks up unauthorized charges with your card, you won’t be on the hook for the purchases. Most banks will also send alerts or even freeze your card if they detect suspicious activity.
Having a thief drain your bank account by using your stolen debit card information is the last thing anyone needs over the holidays. Although it’s possible to get your money back, it’s often a long and difficult process.
Get built-in protection when you travel
Traveling during the busy holiday season is already stressful (and expensive). Flight delays, weather cancellations, and lost bags can put a big dent in your holiday plans — and your pocketbook.
If you pay for your flights or other travel with cash or debit, you’re missing out on extra travel protections that come automatically with many of the top travel rewards credit cards. Depending on the card, these can include:
Without fail, I always use my Chase Sapphire Reserve® to book flights. Not only does it offer all of the protections mentioned above, but it also earns 5 Ultimate Rewards points per dollar on air travel booked through Chase (and 3x points if I book directly with the airline, after earning the card’s $300 travel credit).
Good to Excellent
3 free nights (each valued up to 50,000 points) after qualifying purchases and 10x total points on eligible purchases in select categories
Good to Excellent
$200 after spending $500 on purchases in the first three months from account opening
Good to Excellent