Holiday Spending Plans Meet Tighter Credit Standards
According to PayPal’s 2026 Holiday Shopping Survey, as reported by CNBC, sixty-four percent of U.S. adults expect to spend the same or more than they did last holiday season. Still, the credit shoppers might rely on to pay for that spending is becoming more difficult to get: a September survey from the Federal Reserve Bank of New York found more Americans report credit is harder to get than a year ago.
The gap shows up in bank behavior. A separate October Federal Reserve survey on bank lending practices found that 6.0% of bank respondents — and 10.5% of large banks in particular — said standards for credit card approvals have tightened somewhat.
Set a Holiday Budget Before Picking a Card
Before applying, shoppers should establish what they are comfortable spending on gifts, travel, food and other seasonal expenses. Ideally, cardholders pay the balance in full each month to avoid interest; if a balance is carried, paying it off before optional spending resumes keeps costs down.
Budgeting tools can help. Quicken Simplifi connects to more than 14,000 financial institutions and categorizes spending, savings, income, subscriptions, rent and credit card payments. It costs $3.49 per month for the first year under a limited-time offer, then $6.99 per month billed annually, and comes with a 30-day money-back guarantee rather than a free trial.
Non-negotiables matter too. A card with no foreign transaction fees belongs near the top of the list for frequent international travelers, while the rewards type should match how redemptions will actually be used — points or miles for travel, statement credits or direct deposits for cash back. The Citi Double Cash Card, for example, earns a flat 2% cash back on all purchases — 1% when you buy and 1% when you pay — plus $200 cash back after spending $1,500 in the first six months, though it charges a foreign transaction fee and its 18-month 0% intro APR applies only to balance transfers.
Credit Report Review Improves Approval Chances
Approval depends on multiple factors, and while the credit score is usually the largest, current debt, income and the number of recent applications all play a part. Reviewing the credit report for errors — a missed payment that never happened or an inaccurate balance — can remove obstacles before applying.
Free tools can close a small gap. Experian Boost lets users report payments for cellphone, utility, streaming and rent bills, works retroactively for past eligible bills, and shows an average credit score increase of 13 points, though results vary.
Prequalification and preapproval tools use a soft credit check that does not affect the score, unlike a full application, which involves a hard check that may temporarily lower it by a few points. Narrowing options to one or two cards before applying formally avoids stacking hard inquiries, which can signal to lenders that a borrower is risky.
Secured and Starter Cards Fit Limited Credit
For shoppers whose priority is access to more credit rather than premium perks, a flashy rewards card may not be necessary — annual fees can outweigh benefits that go unused. Those with limited or poor credit may find a secured card the better route: it requires a refundable security deposit that acts as the credit line.
The Discover it Secured Cash Back Card requires no credit score to apply, opens with a refundable deposit as low as $49 for a credit line starting at $200, earns 5% cash back in rotating quarterly categories plus unlimited 1% on everything else, and matches all cash back earned at the end of the first year. On-time payments can build credit and lead to the deposit being returned and an upgrade to the unsecured Discover it Cash Back Card.
Unsecured options exist for limited-to-fair credit as well. The Chase Freedom Rise earns 1.5% cash back on all purchases with no annual fee, and approval odds improve for applicants holding a Chase checking or savings account with at least $250 deposited.
Holiday Credit Card Questions, Answered
Does applying for a credit card hurt my credit score? A full application triggers a hard credit check that may temporarily lower the score by a few points, according to CNBC’s review of the process. Prequalification and preapproval use a soft check that does not affect the score.
What can I do if my credit score is too low for a rewards card? A secured card such as the Discover it Secured Cash Back Card lets applicants open an account with a refundable deposit as low as $49 and no credit score requirement, while on-time payments help build credit.
How much are banks tightening credit card standards? In the Federal Reserve’s October survey on bank lending practices, 6.0% of bank respondents and 10.5% of large banks said credit card approval standards had tightened somewhat.
Whether tighter approval standards will actually slow the holiday spending that 64% of Americans plan remains an open question the surveys do not answer.