Spending peaks during the holiday season. Are you making a mistake in the way you spend?

Spending money during the holiday season is inevitable for most Americans. After all, there are gifts to buy, events to attend, and loved ones to visit. 

While you want to keep your spending to a reasonable level, you also want to be as smart as possible about how you pay for the items you need to buy. Unfortunately, the majority of Americans are making a mistake when it comes to their choice of payment method. 

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This common mistake could cost you during the holiday season

According to a recent survey from YouGov, just 30% of Americans are planning on using only credit cards for their travel-related holiday spending holiday spending while only 19% will exclusively use credit cards for gifts and just 17% will exclusively use cards for entertainment-related spending.

This means the majority of Americans are either splitting their purchases equally among debit cards and credit cards, prioritizing cash or debit cards over credit, or paying exclusively with debit cards or cash instead of credit cards. 

For most people, it can be a big mistake to use anything other than a credit card for holiday spending. This isn’t the case for those who have problems controlling their spending and who are likely to end up in debt if they don’t use cash. But for anyone who can pay off their cards after they charge on them, using credit exclusively would definitely be the smartest move. 

Why should you use credit instead of other payment methods for holiday spending?

Using credit exclusively for your holiday spending is smart for lots of reasons. One of the most obvious is that credit cards can offer generous rewards while debit cards and cash don’t. 

Many credit cards provide bonus rewards for travel or dining purchases that are common during the holidays. You can also find rewards cards that give you bonus points for shopping at Amazon or big box stores where you may buy many of your holiday gifts. 

If you don’t use cards, you are missing out on the chance to get points, cash back, or miles. These card rewards can help you to offset the cost of your purchases by giving you some of your money back. There’s no reason not to take advantage of this, as long as you can handle your cards responsibly and make sure you’re able to pay the bills off before incurring interest charges. 

There are also other reasons to use credit cards.

Credit cards can provide protection for your purchases that debit cards and cash don’t. For example, many cards come with extended warranties for your purchases. It’s also common for cards to offer purchase protection that reimburses you if your items are damaged or stolen within a short time after purchase. Price protection, which covers you if prices fall, and return protection, which helps you deal with merchants who make returns difficult, are also offered by some cards. 

You don’t want to miss out on the rewards and buyer protections credit cards offer, so always reach for your credit card when paying for holiday purchases unless you don’t trust yourself to be responsible with your spending. 

Don’t make this holiday spending mistake

If you’re among the majority of Americans not planning to exclusively or primarily use credit this holiday season, consider changing course. It’s not too late to sign up for a great rewards card if you don’t have one, or to research the rewards and benefits your current card offers so you can find the best card to pay for all of your holiday costs.

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