8 Reasons to Consider a New Credit Card for Holiday Shopping and Travel

The year-end holiday shopping and travel season used to start on the Friday after Thanksgiving. But this year, as in other recent years, some retailers brought out their holiday promotions before Halloween or even as soon as the back-to-school shopping period ended.

Promotions are great for consumers because the holiday season is short, and there’s a lot to do: buying gifts, decorating trees, making travel arrangements, planning parties, organizing meals, and more. I’m one of those super-organized people, so I’ll grab any chance to get a jump start on a big project.

Applying for a new credit card can make the holidays easier and set you up for great benefits, like rewards, introductory 0% annual percentage rates (APRs), travel perks, and first-year waivers of annual fees.

A new card could also help you improve your credit score and qualify for other types of financing, such as a car loan or personal loan.

With that in mind, here are eight great reasons to apply for new cards for your holiday shopping and travel this year.

Rewards programs are the main reason I use my cards as often as I can. My favorite rewards are cash back and hotel stays, but I like airline miles and shopping points, too. 

The holiday season is a great time to earn extra rewards, which I can use next year.

If you’re ready to level up your rewards, you can start by applying for a new credit card that offers a more attractive reward program or types of rewards you aren’t currently earning. That might mean getting a new travel card, a new cash back card, or a new card that offers points on purchases.

By getting a new card now, you could earn better rewards not just for this year’s holidays, but for next year’s, too.

Many great cards come with a signup or welcome bonus offer, which may include additional cash back, points, or travel rewards if you spend a certain minimum amount with your new card within three to six months, depending on the terms. 

If you’re going to spend that amount either way, why not shop with a new card and collect the signup bonus?

With extra cash back or other points, you could buy nicer gifts, splurge on fancy gift bags or bows, or buy something special for yourself for the holidays. With bonus airline miles or hotel stay points, you could upgrade your travel plans with more destinations, longer stays, more convenient flights, or nicer hotels. Either way, it’s a win.

Be sure to read the details of the card’s signup bonus offer and other terms before you apply.

Thanksgiving, Christmas, and New Year’s are popular and stressful times to travel. Whether you’re going someplace yourself or gifting airline tickets or hotel stays to your family or friends, having some extra cash back or travel rewards from your cards can help.

Travel credit cards offer rewards and other benefits specifically designed for travelers. With this type of card you may get one or more of the following perks:

• A signup bonus
• Statement credits towards travel purchases
• Double, triple, quadruple, or even 10X rewards for travel booked through the card company’s travel service
• A card anniversary rewards bonus
• Priority access to airport lounges worldwide
• Trip cancellation, trip interruption, or lost luggage insurance
• Auto rental collision damage waivers
• A statement credit towards your Global Entry, NEXUS, or TSA PreCheck fees

My favorite travel credit card offers points for hotel stays. Dollar-for-dollar, the hotel points are worth less than the rewards for my favorite cash back card, but the hotel card also gives me other benefits, like free in-room wifi and bonus hotel points for spending at that brand’s properties, so I use it often. 

The hotel-stay rewards are also great for local trips when I want to drive to my destination and stay overnight at a nice hotel for less (or even for free).

Some travel cards have an annual fee. Before you apply for a card of this type, you should consider whether you’ll earn (and use) enough rewards to offset the fee.

With zero credit card debt, I don’t have to consider APRs when I shop for new cards. But for people who carry a balance, APRs should be a top consideration. A new credit card that offers an interest-free period, often known as an “ Introductory 0% APR,” for new purchases, balance transfers, or both can be especially valuable during the holiday season.

That’s because the 0% APR gives you a temporary break from paying interest on your new purchases or transferred balance. The break is usually for at least six months or up to as long as 18 months. If card interest rates go up, as they often do, your 0% APR becomes even more valuable. 

Here is a look at the potential balance transfer savings for a 0% APR offer vs. a credit card with a 20% APR over 12 months:

Amount Transferred	3% Balance Transfer Fee	12-Month Interest Savings
$1,000	$30	$200
$2,500	$75	$500
$5,000	$150	$1,000
$7,500	$225	$1,500
$10,000	$300	$2,000

If you apply between June and December and your 0% APR lasts 18 months, you’ll have it not only for this holiday season, but for next year’s holiday season, too.

You could use a new card with a 0% APR for purchases to spend more for the holidays, if that makes sense for you. Or you could transfer a balance to that card. If you choose to forgo additional spending and continue to make the same monthly payment, you should be able to lower your balance by not paying as much in interest, giving yourself and your family the gift of less card debt going into the new year.

Be sure to mark your calendar for the end of the promotional 0% APR period, because when it ends, your new card’s full APRs will be applied.

Inflation has hit everyone’s household budget in recent years. I’ve seen higher prices for groceries, gas, heating, medical care, clothing, and many other essentials.

A new credit card could help you manage those higher costs without cutting back your holiday spending by raising the amount of credit you have available, if that’s appropriate for you.

It might be beneficial if you:

• Recently got a pay raise or a new job with a higher salary
• Sometimes use cash for purchases you could pay for with a card
• Typically use less credit than you could manage
• Rebuilt your credit with a card that has a low limit, and you’re ready for a new card with a higher allowable spend.

Keep in mind that even if prices are rising and you get approved for more credit, you shouldn’t charge more than you can afford to repay.

Credit scores are three-digit numbers that help lenders and card companies decide whether to offer you credit and, if so, with what rate and terms. With higher credit scores, you may be offered lower rates, longer repayment periods, and cards with more valuable rewards.

One factor in your credit scores is your credit utilization ratio, which measures how much of your credit you’re using. To calculate your ratio, add up how much you owe on all your cards, add up your credit limits on all your cards, divide the total amount you owe by your total amount of credit, and multiply the result by 100.

Keeping your credit utilization ratio at less than 30% is a good financial habit and may help to raise your credit scores.

One way to lower your credit utilization ratio is to increase the total amount of credit you have. Suppose you have three credit cards with total balances of $2,750 and total credit limits of $10,000. With those totals, your credit utilization ratio is effectively 28%. 

Here’s a closer look at the math:

	Card A	Card B	Card C	Overall
Balance	$500	$0	$2,250	$2,750
Credit Limit	$2,000	$3,000	$5,000	$10,000
Utilization Ratio	25%	0%	45%	27.50%

If you get a new card with a $4,000 credit limit and a $0 balance, your ratio drops to 20%. That could enable you to charge more during the holiday season (or at a later time) without exceeding your initial credit utilization ratio of 28%.

Keep in mind that many other factors also affect your credit scores.

Buy Now Pay Later (BNPL) plans are designed to offer flexibility and convenience. That may sound great, but it might also explain why many people say they’ve used these plans to buy things they don’t need and can’t afford or later regret purchasing. 

If you’ve been using BNPL plans, you might want to consider getting a new credit card for your holiday shopping and travel instead. Credit cards are simple and easy to use without confusing payment schedules, and they may be less likely than BNPL plans to trigger impulse purchases.

If you’re anxious about your holiday spending budget, you might be hesitant to take a chance on a new card with an annual fee, even if you like the signup bonus, rewards program, or other benefits. 

That’s when a card with a first-year annual fee waiver could be a good choice. The first-year fee waiver lets you try out the card for a year before you decide whether you want to keep it and pay the fee for the next year.

After reading over these eight reasons, make sure to assess whether a new credit card fits your financial situation. If so, you just might find that you’re ready to go ahead and apply.