Using credit cards to your advantage: How to earn rewards without carrying holiday debt

WalletHub experts say strategy, not spending, is the key to smarter credit card use

by · ABC15 Arizona
As Americans swipe through the holiday season, credit cards remain one of the most powerful and risky financial tools in consumers’ wallets.

As Americans swipe through the holiday season, credit cards remain one of the most powerful and risky financial tools in consumers’ wallets.

New data from WalletHub shows many households are entering the new year with growing balances, but experts say the way you use credit cards matters just as much as how much you spend.

At a Phoenix gas station, Steve Nemecek, an ABC15 Smart Shopper, showed how strategic card use can turn everyday purchases into savings.

Nemecek carries multiple cards, each designed for specific expenses.

“I usually carry two credit cards,” Nemecek said. “The reason I carry two is because one of them gets great points on gas and groceries, so that's my gas and groceries card. The other gets great points on travel.”

It’s all about maximizing rewards.

“Points translates to cash back, and you want cash back at the holidays,” Nemecek said.

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That advice comes as millions of Americans struggle to keep balances under control.

According to WalletHub, 43% of Americans say they do not plan to pay off their holiday purchases in full by the first due date. WalletHub data shows the average U.S. household now carries more than $10,000 in credit card debt, with interest rates hovering above 22%.

Chip Lupo, WalletHub analyst and writer, says inflation and rising everyday costs have forced many families to rely on credit cards for essentials, turning holiday spending into a compounding problem.

“Always pay more than a minimum, because the minimum, if you do that, you're just in a vicious cycle of debt that you will never get out of,” he said.

Lupo’s advice:

  • Create a post-holiday budget
  • Pay more than the minimum
  • Consider 0% intro APR cards if you can pay them off before the promotion ends

“There are many cards that will give you a 0% introductory interest rate on purchases,” Lupo said. “That can be anywhere from 12 to 18, sometimes 21 months, depending on the card. And then you can make your purchases and then pay that off over time without any interest.”

Nemecek agrees that discipline is what separates smart credit use from costly mistakes. He says great way to avoid mistakes are setting reminders or automatic payments to ensure balances are paid in full each month.

“They are a huge savings tool,” Nemecek said. “Just make sure you pay them off every month.”

This story was reported on-air by a journalist and converted to digital with the assistance of AI. The content was editorially reviewed for accuracy, fairness, and clarity.

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