Jun 05, 2021

Now that Halloween is over, retailers are heading full speed into their holiday season promotions. They’re lowering prices, decorating festively and bolstering their inventory for the two biggest shopping holidays of the year – Black Friday and Cyber Monday. All signs indicate that this year should be even more hectic – and profitable – than the last.

Predictably, credit card issuers are right there with them. Companies like Visa and MasterCard are sweetening their signing bonuses in a bidding war to put their plastic in the wallets of the frenzied shoppers that spent $45 billion in less than 24 hours in 2010. As a result, there have been wave after wave of articles advising consumers on “the best holiday credit cards this season.”

The best holiday credit cards of the season? These credit card guides certainly provide good information on the various seasonal offers floating around, but should they really be encouraging Americans to sign up for a new credit card before they start shopping for the holidays? We don’t think so, for a few reasons:

Most of the bonuses aren’t meant just for the holidays

Groceries aren’t typically the first thing that comes to mind when you hear the term “holiday shopping,” but the fact that the American Express Blue Cash card offers 6% back on groceries somehow qualifies it to be included on a “best holiday credit cards” list. The same can be said for the UPromise MasterCard. The holiday angle here is that the UPromise card will put 2% – and occasionally 10% – of your purchases toward your child’s college savings program.

Our Score 9.8 out of 10
American Express Blue Cash

The ones that are special have a catch

On the other hand, there actually are some good credit card sign-up bonuses out there. The $200 offered by the Citi Dividend World MasterCard is the first that comes to mind. However, in order to get these bonuses you have to spend $500 within the first three months of opening the account – assuming you have the excellent credit required to obtain the card. Although that’s not too tall an order, the problem is that once the card’s promotion ends, you’ll likely just leave the card to die in your wallet. This is partially because all of the Dividend World bonuses drop to universal 1% cash-back in 2012. But it’s mostly because…

Our Score 9.6 out of 10
UPromise MasterCard
Our Score 9.4 out of 10
Citi Dividend World MasterCard

You have enough credit cards as it is

The chances are good that if you plan on spending $500 on presents and indulgences this holiday season, you’ve already got a solid rewards credit card that you use for purchases. In fact, statistics suggest that you probably have two or three. Why add another one to the pile? The only thing you’re doing is forcing a hard inquiry into your credit score and – if you spend money on the new card and carry multiple balances – altering your credit utilization ratio for the worse. This translates to a lower overall credit score, which can really hurt loan financing if you plan on buying a car or house within the next year.

To put it succinctly, the best holiday credit card might just be the one you’ve already got in your wallet. Although a few news outlets might make out these seasonal bonuses to be a huge boon to shoppers, they’re really not anything special. The only reason you should apply for a holiday credit card is if you were planning on signing up for a new, regular-use credit card already. Otherwise, make the responsible decision and give yourself the best gift of all – an uncluttered wallet and an unaltered credit score.

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