Credit cards have the potential to make a big impact on your finances. They’re a great way to build your credit history, earn rewards and some even come with some pretty handy perks. But many Americans are spending less time choosing a credit card than they are remembering their video streaming passwords. That may be even truer around the holidays when issuers are pushing huge sign-up bonuses. So, what does that mean for you?

Getting a credit card this time of year isn’t a bad idea. In fact, it may even be in your best interest, depending on your situation. This guide will layout everything you need to know when it comes to choosing a credit card this holiday season.

Personal Finance expert Jeanette Mack talks with Justin Zeidman , head of credit card products for Navy Federal Credit Union about how to choose the credit card


It can be tough to figure out where to begin when looking for a credit card. Start by figuring out how and where you spend most of your money. Try to think beyond your holiday shopping, and really how do you plan to use this card long term.

Take a look at the last three to six months worth of spending history. You’ll want to look for any patterns in your spending habits. For example, if you consistently see that you spend a good amount on gas, it could be worth finding a card that rewards you for those purchases. A good rule of thumb – you shouldn’t have to work for your credit card, it should work for you.

Let’s say you love to cook and rarely dine out. You probably won’t find a lot of value out of a card that rewards you for purchases at restaurants. Or if you’re like many servicemembers who plan on traveling home for the holidays, maybe finding a card that rewards you for travel purchases. Figuring out your spending habits is sort of like the boot camp of credit card shopping. Everyone’s got to do it and while it certainly isn’t all that fun, it’s the foundation for everything to follow.

Pro Tip: Track your spending and find a card that directly aligns with the purchases you make most often.

Sign-up bonus or smoke screen?

A sign-up bonus is often the first thing you’ll see in a credit card offer. Because the credit card industry is so competitive, issuers push large promotions giving you the ability to earn a boatload of points, miles or cash-back. Some offers even include a purchase grace, giving you time to pay down those larger purchases without paying interest for a certain period of time.

While sign-up bonuses are a great way to come into a windfall of points, they shouldn’t be the only reason you apply for a credit card. A lot of retailers will offer you a certain percentage off your purchase if you sign-up for a store credit card, but that may not be the best idea.

“What you may not realize is that a lot of those cards come along with a 25 to 30 percent interest rate on the card,” said Justin Zeidman, head of credit card products at Navy Federal. “While sign-up bonuses are really important to choosing the right card for you, you want to make sure that you’re understanding not only the way that you spend, but what are all the features and benefits that come along with the card to make sure you’re getting the most value.”

Pro Tip: Sign-up bonuses are great, but don’t forget that the interest rate, rewards structure and other benefits will determine the long-term use of the card.

After the smoke clears…

Now that you’ve determined your spending habits and you’re familiar with what to look out for with sign-up bonuses, let’s take a look at those additional benefits that can help get you through the holidays.

  • TSA Pre-Check®/Global Entry - Some cards offer reimbursements for TSA Pre-Check or Global Entry. A super helpful benefit for those that might be traveling during the holidays and beyond!
  • Free 2-Day Shipping – Other cards offer free two-day shipping at select online retailers, super useful for those last minute purchases.
  • Cell Phone Protection – Buying a new phone for the holidays? Some cards offer cell phone protection coverage just by making your monthly payments with that card. A great added benefit at no additional cost to you.

For a lot of folks, nothing is more important than security and that’s probably more true for military servicemembers who are often targeted by fraudsters. And with more than half of Americans projected to spend more than half of their holiday shopping money on online purchases, it’s important you have the tools in place to keep your finances secure.

  • Freeze/Unfreeze – Find a card that allows you to take command of your card management on the go. With Freeze/Unfreeze you can temporarily freeze your card to prevent any purchases from being made.
  • Travel Notifications – This alerts your bank or credit union that your card may be used in another location. Set up travel notifications ahead of block leave to ensure card usage isn’t interrupted while visiting loved ones.

Pro Tip: “At the end of the day, when you’re picking a card you want to look at not only the short term but the long term as well. The best way to do that is to understand the reward structure that comes with the card, the interest rate that’s going to be on the card long term, but also what are the other features and benefits that come along with the card as well,” added Zeidman.

The holidays are a great time to think about getting a credit card, especially if there’s a pretty attractive sign-up bonus associated with it. Just remember to find a card that rewards you for all the ways that you spend, think beyond just the holiday season and don’t forget about those ‘other’ benefits. Choosing a credit card isn’t meant to be hard, but if you do it right, it certainly should take longer than figuring out your Netflix password.