Have you ever thought about how Santa pays for Christmas? I'm sure you didn't as a kid, but adulthood evokes financial realities, and while you could rely on a bit of North Pole magic, you could also take advantage of the many attractive offers that currently exist in the credit card space, which have the potential to save you hundreds of dollars.

Tutorial: What to Know About Credit Cards


A sliver of silver lining from the Great Recession is the effect it has had on the consumer recruitment efforts undertaken by credit card companies. More specifically, the body blows the financial downturn administered to the portfolios of major credit card companies in the form of high delinquency and default rates emphasized the importance of garnering a financially stable customer base. So, like NCAA rule breakers, credit card companies are offering gifts to recruits with high credit scores in return for opening new cards. Given that these gifts typically come in the form of lucrative initial rewards bonuses and/or lengthy 0% introductory rates, they can be quite helpful during the busy holiday shopping season.

The best of the bunch are the following:

  • Initial rewards bonus: The Chase Sapphire Preferred Credit Card offers 50,000 bonus points for spending $3,000 in the first three months after account opening, and does not charge an annual fee during the first year. The bonus points are worth either $625 in travel accommodations or $500 in the form of a check or statement credit.
  • Zero percent on purchases: Roughly 29% of U.S. adults will need a few months to pay off holiday gift purchases this year, according to an American Express survey. A 0% credit card, like the Citi Dividend World MasterCard, would prove useful to members of this group, given its 15-month 0% purchase APR, $100 initial rewards bonus and 5% cash back on purchases made at numerous stores through the end of the year.
  • Zero percent on transfers: Around 14 million U.S. consumers are still saddled with debt from the holidays last year, according to a Consumer Reports survey. Opening a 0% balance transfer credit card, like the Citi Platinum Select MasterCard, which does not charge interest on transferred debt for 21 months, could help you pay off debt faster and thereby make this year's holiday season easier to handle, both financially and mentally.

Are These Cards Right for Everyone?
There are two types of people for whom the aforementioned cards are not a good fit. These cards are not a good fit for those with average or below-average credit, or those that will need the best possible credit score in the next six months because of an important loan application.The reasons for this are simple. You will not get approved for any of the cards mentioned above without excellent credit (typically a FICO score above 720) and your credit score may take a short-term hit when you open a new loan or line of credit. (For more on credit, read What Credit Score Should You Have?)

For the latter reason, some consumers may be hesitant to open a new credit card just to save on holiday expenses, even if they don't have any looming credit decisions. If you fit this description, you want a credit card that will prove financially helpful not only during the holiday season, but also throughout the rest of the year and beyond.

The Capital One Venture Card is the "most rewarding card if you crave free airline flights," according to Money Magazine. It offers two miles for each dollar that you spend, which amounts to 2% cash back as long as you redeem miles for charges related to travel. It also provides a $100 initial rewards bonus for spending $1,000 in the first three months and, like all Capital One credit cards, does not assess foreign transaction fees, meaning it is a good tool for overseas travel.

The Bottom Line
Ultimately, whichever card you settle on, if any, I hope that your holidays are happy and free of financial concern.


Odysseas Papadimitriou is the CEO of Card Hub, an online marketplace for secured and unsecured credit cards, prepaid cards and gift cards.

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