Credit Card Christmas? Make Sure You’re Using the Right Card for You

Despite the fact that many consumers are cutting back on holiday spending, it is still likely that a credit card Christmas still comes into play for many. And if you are already in debt, that can be a problem. Peter Pham, the CEO of BillShrink.com, points out that the average American household already has $8,300 in credit card debt. “Add Christmas shopping to that, and you get a pile-up of interest charges and fees. You have to be careful.”

Pham’s company aims to help consumers do just that: Be careful. “When you already have debt, and you decide to use a credit card anyway, you want the one that costs the least amount of money. It’s not about rewards at the point, because anything you charge will likely negate any savings you might have had.”

But BillShrink.com isn’t just about finding a card with a lower interest rate. Pham tells me that the especial purpose is to help consumers who pay off their balances each month find the card that maximizes their rewards. “We have you tell us your top spending categories, and your habits, and convert the rewards you could earn into a dollar amount. That way you can compare credit cards to see which is most worth using.”

The economy and credit card rewards

“Right now,” Pham says, “many people are looking for cash back cards. There’s less airline redemption and more interest in getting money back. It’s due to the recession. People want something, like money, that they can use, rather than airline miles that can be difficult to redeem.”

He also says that for those looking to maximize their credit card rewards in this economy can benefit from sound habits this holiday season. “Most people earn their points during the holidays,” Pham points out. “For those who are responsible and pay their balances off each month, this is the time to earn optimal cash back. If you’re going to spend hundreds — or even thousands — of dollars, you deserve the right card to maximize your savings and cash back.”

My take on BillShrink.com

Personally, I like the idea of BillShrink.com. I enjoyed putting in my credit cards and seeing which were really not as good as advertised. I also got some solid recommendations for upgrades. The other thing that is nice about  BillShrink is that the options given are those that you are most likely to qualify for. “We aren’t going to be giving you a recommendation for something that your credit score doesn’t allow you to qualify for,” Pham insists.

And, while I don’t advocate going on huge shopping sprees with a credit card, I can see where BillShrink can help those in debt to find low interest credit cards (what’s left of them) for balance transfer purposes. I also like the idea of maximizing your rewards. In this economy, every little bit helps.

Disclosure: I do not work for BillShrink, nor have I been paid by the company or offered gifts or any other compensation. I conducted an interview with the CEO of the company, Peter Pham, at his request, and visited the Web site.