Should You Open a Credit Card Post-Holiday Season? 5 Reasons You Should and 3 You Shouldn’t

People complain about the commercialization of Christmas, but they keep spending at record levels — often overspending their budgets.

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And sure enough, ballooning consumer debts reflect that spending. A survey by LendingTree after the 2024 holiday season found that 36% of Americans took on credit card debt to pay for it, most of whom hadn’t planned on it. With all that credit card debt already piled up, should consumers open another credit card now that the holidays have passed?

It can make sense for some consumers — but only if they open cards for the right reasons. Consider the following reasons to open a new credit card post-holidays, and beware of the risks, as well.

Balance Transfer to a 0% APR Card

As a promotion to attract new customers to open cards, some companies offer 0% interest for the first 12-24 months. That can give consumers the breathing room they need to pay off the card without interest compounding on them.

“Opening a zero balance transfer card can help you pay down debt faster while saving on interest,” explained personal finance expert Andrea Woroch. “Just make sure to compare balance transfer cards to find the longest 0% interest period and lowest balance transfer fee.”

That last part is worth reiterating. Some cards charge a fee for balance transfers, even as they lure you with 0% interest for an introductory period.

Still, that one-time fee could cost less than the alternative, Woroch said. “A 3% balance transfer fee may still cost less than what you’d pay in interest each month while trying to pay down debt.”

And some cards don’t charge any balance transfer fees.

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Optimize Rewards for Your Upcoming Plans

If you rarely fly, it probably doesn’t make sense to open a travel rewards card. The same goes for other types of credit card rewards.

“Opening a new credit card in the new year should be part of re-evaluating and re-aligning your personal finance strategy,” said Josh Bandura, co-founder of Frugal Flyer.

That might mean closing old cards that charge high annual fees, in addition to opening new ones — but make sure you’re aware of the effect closing cards can have on your credit score.

Bandura urged consumers to consider what perks would benefit them most. “If you are planning on traveling a lot, adding a card that offers free airport lounge access can be a great idea. Or perhaps one that offers comprehensive travel insurance coverage, including insurance coverage for rental cars, to save additional money.”

Just don’t open a new card without a good reason for doing so — especially if it charges an annual fee.

Establish Credit History

If you don’t have much credit history established, the post-holiday season can be the perfect time to start.

Melanie Musson, a personal finance expert with InsuranceProviders.com, pointed out that credit cards offer an easy on-ramp for building consumer credit. “If you’re just starting to build your credit, a credit card can help establish a history that will set you up for better loans in the future.”

The longer track record you have of making payments on time, the higher your credit score will grow. But many monthly payments — such as rent and many utilities — don’t report to the credit bureaus. Credit cards do.

Reduce Credit Utilization Ratio

One of the factors that credit bureaus use to calculate scores is the credit utilization ratio. That is the percentage of available credit that you currently use with debt.

For example, if your total combined credit card limits add up to $10,000, and you carry $3,000 in combined balances, you have a credit utilization ratio of 30%. Which, by the way, is the threshold above which balances start hurting your credit score.

“A new card can boost your credit score by increasing your overall credit limit,” explained personal finance expert Erika Kullberg of Erika.com. “That in turn will lower your utilization rate, as long as you can avoid carrying a balance on the new card.”

Why Shouldn’t You Open a New Card Post-Holidays?

For all those advantages, opening a new credit card after the holidays comes with its share of risks.

Kullberg pointed out that the impact on your credit score isn’t all positive. “A new card application will mean a hard inquiry against your credit, which is likely to temporarily ding your score.”

It can also incentivize you to spend more than you would have otherwise, in order to reach the spending threshold needed to score signup bonus points.

Spending incentives aside, it hands consumers deep in the hole of debt a shovel to keep digging. Howard Dvorkin, the chairman of Debt.com, has seen this time and again.

“If you’ve emerged from this holiday season with huge credit card balances, the last thing you want to do is apply for another card,” he said. “That’s like trying to lose your holiday pounds by eating more turkey and ham. Your better option is to get professional help paying down those balances, which will free up your finances to be more flexible in 2025.”

Don’t dig yourself deeper in the hole of debt. Only add a new credit card if it makes sense on its own merits — regardless of the time of year.

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