credit card advice
It is unwise to live beyond your means and regularly spend money that is not yours, but there are benefits from making an exception doing your holiday shopping with credit cards.
You already do a lot of spending during the holidays, so it is great opportunity to earn cash back or points if you have a reward card.
If you do not have quite enough cash on hand, you can put the purchases on your card to cover it — as long as you pay off the balance as quickly as possible.
Remember that whenever you make smart decisions with credit cards, like keeping a low debt-to-credit ratio and paying off your balances, it can help you build better credit.
Select one from this list of the best credit cards for holiday spending, which are all geared toward people with less than ideal credit. Keep our “stay smart” warning in mind for each of them.
1. Barclaycard® Rewards MasterCard®
Every dollar you spend with this credit card earns you reward points you can redeem on travel, dining, shopping or even to pay for purchases you make with the card. Plus, there is no annual fee.
This credit card comes with a 0% introductory APR for six months, so if you get it right before the holidays and put your purchases on the card, you will have several months to pay off the balance without any interest accruing.
Stay smart: After the first six months, the APR goes up from 0% to 24.99 percent. It would be unwise to get this card if you plan to carry a balance past the first six months, as your interest payments may be large and make it difficult to pay off your debt.
2. PayPal™ Prepaid MasterCard®
Prepaid credit cards are ideal for people who have bad credit and cannot qualify for a traditional credit card. This prepaid card from PayPal also has the major benefits of no overdraft charges or late fees — two things that can cost a lot with other cards.
Earn cash back with this card from a list of offers for certain stores, restaurants and other businesses. You can have your money direct deposited to your prepaid MasterCard account for free, or you can transfer your money from your PayPal account. This is perfect if you get paid for goods or services via PayPal.
Stay smart: This card does have a $5 monthly fee, so you should only apply if you can’t qualify for a regular credit card with no monthly or annual fee.
You also will pay $1.95 each time you withdraw cash from an ATM, so you should not use this to regularly withdraw cash.
3. First PREMIER® Bank MasterCard® Credit Card
If you do not need to carry a balance but want to use your holiday spending to build good credit, try this card from First PREMIER Bank. It is an actual credit card, not a prepaid card. Your credit limit will start at $300 but possibly more like $225 after fees.
While this may sound small, after you show a habit of staying under your limit and paying off your balance, the credit reporting agencies will see your smart behavior.
As your credit score improves, you may receive a higher credit limit. It is the perfect opportunity to show you can handle the responsibilities of a credit card.
After your credit has improved, you can later qualify for rewards cards or cards with other benefits.
Stay smart: The APR on this card is high, so it is not ideal for those who need to carry a large balance. Be aware there is also a $95 processing fee and an annual fee.
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