Credit

Credit makes sense for some types of purchases more than others.

For example, when online shopping, a credit card offers convenience, security and consumer protections that are not present with debit cards. Using a credit card for a big-ticket item, such as consumer electronics, can also help you break the cost down into more manageable, incremental payments (although you will pay interest, too). For smaller in-store purchases, like wrapping paper or stocking stuffers, cash may be a better option.

One tip that financial planners recommend is to choose just one card for your

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holiday credit purchases and remove all others from your wallet. Use it for both in-person and online buying. Opt for the card with the lowest interest rate on purchases or the one that gives you the best reward points for using the card. Using just one card allows you to better track your spending and limits the risk of identity theft or fraud if your wallet is lost or stolen while you are shopping.

Avoid the temptation of using store cards or opening new accounts in exchange for a temporary discount. During the holidays, this type of incentive abounds, but store cards often charge higher interest rates.