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A man looks at bills beside a stack of presents.

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These could all come in very handy.

Key points

  • It's important to avoid credit card debt during the holidays.
  • It's also a good idea to make the most of the credit card perks you're entitled to.
  • Ensure you're using the right cards for different purchases, and find out the interest rates on your cards to know how much you'll be charged if you carry a balance.

The holiday season tends to be an expensive one. From gifts to travel to an ongoing stream of parties (some of which you may be tasked with hosting), many people wind up spending a whole lot of extra money during the holidays -- and risking debt as a result. With that in mind, here are a few tips for managing your credit cards during the holidays -- and also making the most of the perks they offer.

1. Track your spending every week

The number of purchases you make on your credit cards could double or triple during the holidays, especially if you have a lot of gifts to buy. That's why it's a great idea to check your credit card balances on a weekly basis. If those numbers get to be uncomfortably high, you can take steps to cut back on spending or change your gift-giving strategy to avoid ending up with debt on your hands.

2. Pay attention to rotating rewards categories

Some credit cards offer extra cash back on certain retail store purchases during the fourth quarter of the year. If you expect to do a lot of shopping for the holidays, pay attention to those rotating categories so you end up using the right cards at the right time.

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Many credit cards offer sign-up bonuses that can put a pile of cash in your pocket for meeting a certain spending requirement within a specific period of time. You may, for example, be eligible for an offer that rewards you with $200 for making $2,000 in purchases within three months of opening your card. The holidays are a great time to chase sign-up bonuses, since that's when your spending might increase, so dig around and see what offers are out there.

4. Know what interest rates your various cards charge

It's ideal to close out the holiday season without credit card debt. But that may not be the boat you land in. If you're going to rack up some credit card debt in the course of your holiday shopping, pay attention to the interest rates your various cards come with. You're better off carrying a balance on a card with a 16% interest rate than one with a 20% interest rate.

5. Use the right card to book your travel

Many people end up traveling during the holidays. If you plan to do the same, it pays to use a travel rewards card -- or apply for one ASAP if you don't have one. These cards often come loaded with features that help you save money on travel, like free checked bags for domestic flights and discounts on in-flight purchases.

The amount of money you end up spending during the holidays can be overwhelming. Use these tips to make sure you don't get in over your head as far as your credit card balances are concerned -- and to get the most benefit from the cards you end up using.

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About the Author

Maurie Backman writes about current events affecting small businesses for The Ascent and The Motley Fool.

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