How are people planning to pay for their holiday expenditures?

According to a Bankrate survey, 38 percent of in-store Black Friday shoppers plan to pay with cash; 34 percent with debit card; and 24 percent with credit card. 

Online shoppers are different:  46 percent plan to pay with credit and 42 percent with debit. Using a credit card when online shopping is a smart choice because the web is one of the riskiest places to pay with a debit card. Debit account numbers can easily be stolen, and debit cards usually have lower fraud protection.

However, declining credit card use for in-store shopping is not surprising since many Americans want to avoid the credit card horror stories. But, for financially-savvy shoppers, using a credit card to shop in-stores may have its advantages. 

Find out why and how financially-savvy consumers reap more benefits while shopping this season by using their credit cards.

1. With a credit card, shoppers have better fraud protection. When someone commits fraud from your debit card, the money is withdrawn directly from your account. The Fair Credit Billing Act limits credit card holders’ liability for fraudulent charges to $50. Contrarily, the Electronic Fund Transfer Act holds debit card users liable for $50 if the fraud is reported within two days and up to $500 if reported within the next 60 days. After that, the card holder could be responsible for all charges. Although debit card fraud refunds are typically distributed by the financial institution, it may not happen right away.

2. Credit card users have access to extended warranties. This can come in extremely handy for big purchases, and are generally offered by the networks – MasterCard, Visa, American Express, and Discover. Some items, like boats, cars, aircrafts, real estate, used or pre-owned items usually do not qualify for an extended warranty. Always call to make sure before making a purchase! 

3. Purchase protection is a service offered to cardholders which enables them to regain the cost of lost, stolen, or accidentally damaged purchases. For instance, if you crack the screen on the new iPad you enthusiastically planned to give your mother. Again, the terms and conditions may vary depending on the issuer or the network. Nevertheless, getting a refund directly from the card company can be a lot less of a hassle than dealing with the merchant! 

4. Price protection can help cardholders get the lowest prices on products. It is a service that allows eligible cardholders to qualify for a refund if the item they purchased is later sold at a lower price. Issuers determine how long you can search for a lower price, and some control how much money you can get in return.

5. Cardholders get sign-on bonuses and other rewards that allow them to earn a certain percent back (1 – 5 percent is typical for many purchases). People who research their options can maximize their rewards by opening up a credit card that features sign-on bonuses, and rewards for spending a certain amount of money. 

Be cautious, and be aware.

Using a credit card incorrectly can be detrimental to both your wallet and your financial reputation. It is a way to rack up an incredible amount of debt and interest if you are not careful with your spending. No matter what, have a budget, plan your purchases, and stick to your shopping plan.

Take care! 


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