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With Black Friday approaching, it may be time to rethink the mantra that “cash is king” when it comes to holiday shopping.

Sure, paying with cash forces you to stay within a budget to prevent over-spending. It means no tacked-on interest payment. And it may even occasionally qualify you for a discount on purchases in allowing merchants to avoid paying plastic-used transaction swipe fees.

But a truly happy holiday means protecting those soon-to-be-purchased presents along with your long-term finances. That’s where credit cards reign supreme over cash or debit cards.

Here are three reasons why:

The Most Protective Plastic

Under federal law, your ultimate liability for fraudulent use of a credit card is only $50. Many issuers waive that fee if your plastic falls into the wrong hands; if you report a lost or stolen card before bogus charges are made; and if your card number is stolen but not the card itself.

Season’s Thievings

It’s not just seasonal Santas who appear at the mall this time of year. Pickpockets also show up using bump-and-lift efficiently to heist wallets. If yours goes MIA during a shopping trip—or any other time—the cash is lost forever. With a quick phone call to your card providers, those accounts are immediately frozen and replacement cards are issued so that you may resume your holiday shopping.

Purchase Perks

Indeed, credit card rewards such as travel miles or cash-back are one incentive to pull out the plastic. But the list of perks continues when using a credit card to make holiday or other purchases. Check with your provider for details, but benefits can include:

  • Extended Return Policies. Many retailers limit returns to 30 days, but many credit cards extend this policy to 90 days when the purchase with their plastic. Policies vary, but many refund up to $250 or more for returns made within their extended period. Some credit card issuers may require you to ship the item to them (they’ll pay for shipping), so be sure to keep boxes and return items in like-new condition.
  • Price protection. Find a cheaper price after buying? If that retailer doesn’t have a price-drop policy, you may recoup the difference from your credit card issuer. Some issuers offer this perk within 60 days of your purchase.
  • Damage and theft protection. Some issuers will replace, repair or reimburse customers for certain items against accidental damage or theft within 90 days of purchase.
  • Extended Warranties. Even if an item comes with a one-year warranty, some issuers extend your protection to two years when its card was used for its purchase.
  • Chargebacks. If a company doesn’t make good on a product (or service) you bought and won’t refund your money, your card issuer may refund the money to you and charge that cost to the merchant—a process called a chargeback. You may have to file a dispute within a given timeframe and make a good-faith effort to first settle with the merchant, but this insurance is especially useful when shopping online and never receiving merchandise.

Still, while credit cards are a smart choice for shopping, it’s even smarter to protect them. Learn how here.

Brett Montgomery is a fraud operations manager in the IDentity Theft 911 Fraud Resolution Center.

Image courtesy of Jorg Hackemann /


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