‘Tis the season to give … and get rewards

Over 90 percent of military families report having at least one credit card, according to a survey conducted by Consumer Credit. If you already have a credit card but don’t have a great rewards program, ‘tis the season to apply for a second card to make holiday shopping a bit more pleasant.

They say it’s better to give than receive, but with the right credit card, you can do both. Use your rewards card for your holiday purchases and next thing you know, you’ve racked up 30,000 points, which is $300 towards your next airline ticket. Can a flat screen TV or washing machine work that kind of magic? Maybe… if you buy them using a rewards credit card.

"If you spend responsibly, a credit card can be exactly what you need to help you rack up more rewards points, build or improve credit, or have your back in case of emergencies," says Matt Freeman, manager of credit card products at Navy Federal Credit Union. "If your current credit card doesn’t have that capability, the holidays are a great time to consider getting a second credit card with benefits."

Here’s why the holiday season is the best time to make the leap and apply for a second credit card:

Plastic is a strong safety net

You’ve weathered the storm outside the mall. You’ve weathered the storm inside the mall. You’ve dodged screaming children and frantic staff. You’ve sorted through a maze of sweaters in every shape and size, and finally found the perfect gift for your sister.  Then you get to the checkout counter and find something else—your credit card is missing.

Shouldn’t holiday surprises be merry?

It’s useful to have a second card in case your primary card is stolen, lost, or left over the river and though the woods at grandmother’s house. If you’re doing your holiday shopping while stationed overseas, you might need an option that doesn’t charge foreign transaction fees.

Avoid extra holiday stress by having another solid payment option.

Also, credit cards can get declined for numerous reasons, many of which you can’t control. Because their number one priority is protecting your finances, your financial institution might freeze your card if they detect fraud on your account. Make it easy on yourself and have a backup credit card.

Whatever the case may be, a second credit card can be helpful in several emergency situations. It’s not always easy to find the perfect gift, but it shouldn’t be hard to buy it.

New Year, New You. New Credit Card?

This year make a New Year’s resolution you can actually stick to—developing your credit score. Get a head start with a second credit card.

"Your credit score plays a pivotal role in your financial future. It has the potential to save you money on your mortgage, car loan and credit cards," says Freeman. "How much debt you carry versus your available credit is a major part of your credit rating. This is called your ‘utilization ratio.’ Opening a second credit card can improve that."

For example: Raising your overall credit limit by adding a second card will improve your utilization ratio. Let’s say you carry a $1,000 balance on your first card, which has a $2,000 credit limit. Your credit utilization would be 50 percent. If you add a second card with a $2,000 limit, the ratio drops to 25 percent, improving your credit score. 

Freeman recommends keeping your utilization ratio below 30 percent. If you’re currently above that threshold, you may want to consider applying for a second credit card.

Spend to Save

According to Rubicon Project data, the average person plans to spend $1,175 during the holidays this year, up 12 percent from 2015. When you’re planning on buying your gifts with your credit card, why not use a card that gives back?

"Younger borrowers like Millennials typically choose their first card based on the APR. Lower is more attractive because if they revolve their balance, the interest payment is manageable," explains Freeman. "However, a few years down the road, when they’ve had a chance to build credit and up their salary, they should consider a second credit card with perks that fit their lifestyle."

These days, rewards credit cards, like Navy Federal’s GO REWARDS^® card, cater to specific lifestyles. With GO REWARDS, you’ll earn 3 points at restaurants, 2 points on gas and 1 point on everything else—with no cap on points earned. If you plan to eat out with family and friends during the holidays, or take your travels on the road, it makes sense to apply for a card like GO REWARDS and start earning rewards.