Five Best Credit Cards to Use During the Holiday Shopping Season

1. Bank of America Cash Rewards and Power Rewards Visa Cards

Both cards reward you with a full one percent back on your spending; Cash Rewards pays you back in cash, while Power Rewards gives you the option of gift cards, airfare and merchandise.

You can earn additional rewards of up to 20 percent if you shop at participating retailers through BofA's Add it Up program. You must first register your card to get the benefit.

If you're a new cardholder, you can earn a $50 statement credit if you make $50 in purchases in the first 60 days after you open the account.

Perhaps best of all, there's a zero percent APR for the first 7 to 10 months on both purchases and balance transfers. Just make sure you pay the balance back in full as soon as you can in early 2011.

2. Walmart Discover Card

The Walmart Discover Card has the same benefits as the regular Discover Card, plus some additional ones that make it better than the original for Christmas shopping.

In addition to the one percent cash-back reward, you can earn a $20 bonus if you spend at least $100 on one item the same day you are approved for the card. This applies to new customers only.

You can earn up to 20% back if you shop at ShopDiscover. You don't have to register your card to get the bonus: Just enter through ShopDiscover.com and pay with your Discover card .

And there's more: Through year end, you can earn double rewards on internet purchases made with your Discover card, up to $1,000 in spending. To earn the bonus, you must first register your card. Editor's Note: This was a 2010 promotion and not offered in the 2011 holiday season.

3. Chase Sapphire and Chase Sapphire Preferred Cards

The basic rewards package is the same for both cards: You earn two points per dollar on airfare booked on Chase's travel booking tool, one point per dollar on all other purchases.

You can also earn up to 10 bonus points per dollar when you shop online at Chase's Ultimate Rewards Mall, which includes more than 300 merchants.

There are outstanding bonuses for new customers. For Sapphire, you get 10,000 bonus points, worth $100, after your first purchase or balance transfer, no matter what size. New Sapphire Preferred customers earn 25,000 bonus points, equal to $250 in rewards, if you spend or transfer balances totaling $3,000 or more in the first 90 days. Sapphire Preferred carries an $85 annual fee, although it is waived the first year.

4. Target REDcard

Now, when you use a Target-branded credit or debit card to make purchases at its stores, you get an automatic 5% discount on everything you buy right at checkout. That's even better than a cash rebate since you get it immediately.

The discount is good whether you use a Target retail card, a Target Visa card, or a Target debit card, although you can't use the debit card on Target.com.

Of course, the discount only applies to purchases at Target. But for the millions of people who do the majority of their Christmas shopping at Target, this is an excellent, no-frills value. And the discount doesn't end at Christmas: you'll continue to get the five percent discount at Target all year when you use your Target card to pay for purchases.

5. Citi Diamond Preferred Rewards Card

This card offers generous rewards, especially for new customers. You earn 6,000 Thank You points - enough for a $50 gift card - after you spend just $300 within the first three months. You also earn five points for every dollar you spend at gas stations, supermarkets and drug stores during the first 12 months. You earn one point per dollar on all other purchases.

You can earn extra points by using your card to make purchases at Citi's ThankYou.com store. You can also earn an average of four points per dollar when you use your card at participating merchants, whether online or at a retail store.

There is a 0% APR on purchases for the first 12 months. Just don't forget to pay off your balance after the holiday shopping season is over.