It's the most wonderful time of the year ... to shop. A new survey by credit bureau Experian found millennials are 88 percent more likely than the average consumer to open a new credit card specifically for holiday shopping. But experts say you should think twice before opening a new credit card to take advantage of a holiday promotion.
"At this time of the year, everyone is looking to go out and spend for the Christmas season," says Rakesh Patel, vice president of Experian CreditMatch. But, Patel tells CNBC Make It, you need to be careful when it comes to signing up for new credit cards to take advantage of holiday promotions.
"Consumers can get themselves into trouble," Patel says.
Store credit cards, often called retail cards, can cause the biggest problems, Patel says. This is especially true around the holidays when stores pull out all the stops to entice you to put your purchases on a store credit card.
"Retail cards, at this time of year, are really hot," Patel says. They're popular because they typically do not have annual fees. Store cards also are easier to sign up for — most of the time you can apply right at the register.
Yet perhaps the biggest draw of these cards is the deferred interest promotions, like "no interest for 12 months," or "0 percent interest until December 2019." Major retailers such as Amazon, Apple, Home Depot and Best Buy all offer deferred interest.
But consumer advocates such as the National Consumer Law Center warn that these promotions can be dangerous. "Deferred-interest promotions are one of the biggest credit card traps on the market today," says NCLC's staff attorney Chi Chi Wu.
Because the interest is deferred, not waived, the card payments, after the 0 percent APR period ends, can come as an unpleasant surprise. These cards will charge you retroactive interest on purchases going back to when the card was initially used.
Let's say you buy a $2,500 laptop for the holidays using a store card with a "no interest for 12 months" promotion and an APR of 24 percent thereafter. Even if you only have $100 remaining on the card at the end of next year, you'll get a bill for nearly $400 in interest based on the initial purchase price, according to NCLC's calculations.
That's why the smart move is to "avoid them at all costs," Wu says. "No interest sounds tempting now, but you could end up in the trap of huge interest payments later."
Keep in mind that even if the store credit card does not have deferred interest plan, the interest rate may be higher than a typical credit card, Patel says. Visa and Mastercard had average APRs of 23.06 percent, compared with 27.23 percent for store cards, CreditCards.com found.
Opening any type of new credit card also will affect your credit score since it requires what's called a "hard inquiry." That will typically shave off about 5 points, according to credit score site myFICO.
Opening a new card can be a great strategy, but only if you can afford it and budget appropriately, Patel says.
"If you acquire a card, you should definitely utilize that card, and continue to pay that card off, in order to reap a positive credit well-being," Patel says. That includes keeping your credit utilization — the ratio between your total balance across your credit cards and your total credit limit — under 30 percent.
If you're looking to pick up rewards points, the Chase Sapphire Preferred offers a 50,000 bonus points (about $625 toward travel) if you spend $4,000 within the first three months of opening the card. Chase waives the annual fee for the first year, after which it's $95 annually.
Another way to leverage a credit card during the holiday shopping is to monitor rotating rewards categories on cash-back cards. After a survey of the field, CNBC Make It picked the Chase Freedom card as the best card for holiday shopping at department stores. From October through December, the Chase card offers 5 percent back on spending at stores such as Costco, J.C. Penney, Nordstrom and Macy's.
In general, no matter what card you choose, Patel says it's important to budget appropriately so you're not staring down an unmanageable credit card bill come January. "Be mindful that you've got to pay off those cards in quick succession," Patel says.
Don't miss: The best credit cards for holiday shopping
Like this story? Subscribe to CNBC Make It on YouTube!