With consumers’ budgets strained by the coronavirus pandemic as we enter the expensive holiday season, the personal-finance website WalletHub today released the following reports to help holiday shoppers save money and avoid a financial hangover in the new year. Please find key takeaways below, along with commentary from WalletHub (audio files included).
- 2020 Corona and Holiday Shopping Survey – Almost 1 in 3 people are foregoing holiday gifts this year due to COVID-19., and one-fifth of consumers will spend less on holiday shopping this year than last year.
- 2020’s Best Credit Cards for Holiday Shopping – The top cards, chosen from 1,500+ offers, include Capital One Savor Cash Rewards (best initial bonus), Citi Double Cash (best flat-rate cash rewards) & American Express Blue Cash Preferred (best ongoing bonus rewards).
- 2020’s Best Gift Cards – Gift cards have long been the most popular holiday presents, and the top gift cards for this year’s holiday shopping season are:
| Best Gift Cards (WalletHub Score) | Biggest Buyer Discount |
| 1) Starbucks Gift Card (70 points) | 1) Fandango Gift Card (18.85% discount) |
| 2) Target Gift Card (65 points) | 2) Chili's Restaurant Gift Card (10.18% discount) |
| 3) Fandango Gift Card (61 points) | 3) Cabela’s Gift Card (9.06% discount) |
| 4) Walmart Gift Card (60 points) | 4) Applebee’s Gift Card (8.67% discount) |
| 5) Netflix Gift Card (55 points) | 5) Red Lobster Gift Card (7.99% discount) |
- Credit Card Price Protection – With price protection, cardholders can get a refund if the price of a purchase drops soon after the holidays. The best credit cards for price protection are Capital One Savor and Capital One SavorOne.
- Credit Card Purchase Protection – This benefit can help repair or replace recent purchases that are damaged or stolen. The Chase Sapphire Reserve Card is the best credit card for purchase protection.
“The best ways to save on holiday gifts are to shop early, strategically take advantage of discounts and credit card rewards, and think outside the box when it comes to present selection,” said Jill Gonzalez, WalletHub analyst. “Although 1 in 3 people plan to forgo gifts this holiday season due to COVID-19, according to a new WalletHub survey, it’s still possible to show your affection for loved ones without spending much money. The best things in life are free, after all.”
What should people do if they still have credit card debt from last holiday season?
“According to WalletHub’s new holiday survey, around 16% of people still have credit card debt left over from last holiday season, and their gift to themselves this year should be a clear plan for getting out of debt while still making the holidays as enjoyable as possible. A well-thought-out budget is central to that. The right 0% balance transfer credit card offer could go a long way, too,” said Jill Gonzalez, WalletHub analyst. “The combination of a good budget with a 0% credit card will give people a sense of how much money they can spend on the holidays and perhaps unlock some savings.”
Does it make sense to get a new credit card just for the holidays?
“Many people are rightfully hesitant to apply for new credit cards too often, but you definitely don’t want to let valuable savings opportunities pass you by, either. For example, credit card rewards bonuses are near record highs right now, and the winter holiday season may be the only time each year that you spend up to $3,000 within a three-month period, which is required to earn many of the best bonuses,” said Jill Gonzalez, WalletHub analyst. “If you’re going to spend a lot of money, anyway, an upgrade in rewards cards could save you hundreds of dollars, as long as a temporary dip in your credit score is something you’re comfortable with. Just make sure to use the new account responsibly and not as an excuse to rack up debt.”
Should consumers use credit card benefits like purchase protection and price protection?
“Consumers should make sure to educate themselves on their credit cards’ benefits before the holiday season because far too few of us take advantage of secondary perks such as purchase protection and price protection. The right card, used strategically, could save you hundreds of dollars on items that are damaged or stolen soon after being bought, as well as post-purchase price drops, restrictive return policies and more,” said Jill Gonzalez, WalletHub analyst. “However, finding the right credit card for secondary benefits like price protection and purchase protection has gotten a lot harder recently. Several major credit card companies have dropped traditional secondary benefits in the past 24 months. Citi and Discover dropped them entirely, cutting everything from rental car insurance to extended warranties. Barclays, Chase and USAA have discontinued certain benefits. And in 2020, American Express also made changes to its benefits programs.”
Do you have any tips for consumers thinking about buying gift cards over the holidays?
“A gift card can be a great holiday present, even though some people might see it as being less-than-thoughtful. There are several places to buy gift cards at a discount, which could allow you to give a more valuable present without changing your budget. You could also score a great gift card without spending any money, by redeeming unused credit card rewards,” said Jill Gonzalez, WalletHub analyst.
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