The Most Common Holiday Credit Card Traps (and Fixes)

Your Guide to Avoiding Holiday Credit Card Surprises

The holiday season in the United States is one of the periods with the highest credit activity throughout the year.

Below are the most common credit card traps during the holidays, along with practical strategies to avoid them.

Losing control of spending due to the “holiday mindset”

In the U.S., financial psychologists point out that the emotional state of the holiday season—feelings of reward, celebration, and urgency—reduces risk perception when using credit.

This leads consumers to buy more than they intended, especially in stores like Target, Best Buy, and Kohl’s, where promotions are aggressive.

The trap

Impulsive behavior, combined with seasonal marketing, leads to fragmented purchases across many stores and digital platforms.

How to fix it

Set your own spending cap, lower than your actual credit limit. Also try to centralize purchases on one or two cards and activate automatic alerts from your bank.

High APR revolving balance after year-end purchases

The average APR on U.S. credit cards in 2025 remained above 20% annually. Even with modest reductions following Federal Reserve actions, interest rates remain extremely high for anyone carrying a balance from month to month.

The trap

After December expenses, many consumers can only afford the minimum payment in January, which triggers elevated and prolonged interest charges.

How to fix it

Create a payment plan for holiday purchases in advance and choose a card with a lower APR whenever possible.

Misunderstood “Buy Now, Pay Later” promotions

BNPL (Buy Now, Pay Later), offered by companies like Affirm, Klarna, and Afterpay, has grown rapidly in the U.S. But many consumers don’t fully understand the terms.

The trap

Interest-free installments seem harmless, but accumulating several BNPL purchases across different platforms leads to missed payments, date confusion, and penalty risks.

In addition, some plans charge retroactive interest after a single late payment.

How to fix it

Limit BNPL to essential or high-value purchases and activate autopay to eliminate late-payment risks.

Store cards with aggressive promotions and very high interest rates

In the U.S., store cards from retailers like Macy’s, Walmart, Amazon Store Card, and JCPenney offer immediate checkout discounts, pushing consumers to open accounts on the spot.

The trap

These cards usually carry APRs higher than the national average. The initial discount (e.g., 20% off the first purchase) rarely compensates for future interest if you carry a balance.

How to fix it

Evaluate whether the discount truly justifies opening the account. Pay the balance in full before the due date to avoid high APR charges.

Underusing or misusing rewards programs

Rewards programs in the U.S. are complex: points, miles, cash back, category bonuses, and seasonal promotions.

During the holiday season, these programs can yield strong returns—but only if used strategically.

The trap

Consumers often believe points or cash back offset their spending, but that is rarely true if interest accumulates or if the card used isn’t the most advantageous for that category (travel, groceries, electronics, etc.).

How to fix it

Determine which card performs best in each category before shopping. Avoid chasing points at the expense of interest—it almost never pays off.

Credit score drops from excessive credit utilization.

The amount of credit used compared to total available credit—the utilization rate—is a critical factor in the FICO Score. In the U.S., scores above 740 are highly valuable, especially for mortgages and auto loans.

During the holidays, excessive spending can temporarily lower a score.

The trap

Using 60–90% of your limit can drop your score by dozens of points, even if you pay your bill on time.

How to fix it

Keep utilization below 30% whenever possible. Make early payments during the month, before the statement closes.

More frequent fraud and scams during the season

The holiday period is the most vulnerable to fraud in the U.S. Common scams include charity scams, fake UPS/FedEx delivery links, and unauthorized marketplace purchases.

The trap

Consumers notice suspicious transactions too late and waste time disputing charges.

How to fix it

Use cards with strong fraud protection, such as Amex and Discover. Enable real-time transaction alerts. Do not click on unverified email links.

Written by

Gabriel Gonçalves