Credit cards provide many advantages over debit cards when it comes to buying stuff. Sure, you can get into serious debt if you overspend on your credit card, but if you pay off your balance in full every month, you’ll only have benefits to reap from using your credit card. There are ways to take advantage of your credit card if you are looking to save money on your holiday shopping.

Discount On Discounts

Karen Hoxmeier, founder of MyBargainBuddy.com, told DailyMarkets.com how she used her Kohl’s (NYSE:KSS) credit card and saved 30% on her holiday purchases.

Karen said, “I stacked those savings on top of clearance and sale merchandise that was already marked down at least 50%. I was also able to apply $40 in “Kohl’s Cash” that I earned from shopping there the prior month. In total, I was able to get about $500 worth of merchandise for just a little over $100!”

What Your Credit Card Can Do For You

Murali Subbarao, founder and CEO of Billeo, Inc. gave a few tips to DailyMarkets.com on how you can use your credit cards to save money on your holiday shopping:

1. Spend your virtual dollars first

If you are someone who stockpiles points and miles throughout the year, now is the time to take advantage of your “virtual dollars” and find out what you can buy with them.  Start by adding up all of your credit card, hotel and airline points and miles. Each point or mile typically translates to a little less than one cent (between 0.60 to 1.0 cents exactly), which can add up to a nice gift.

One tip: buying gift cards yields the best conversion rates in these programs.

2. See what deals your credit cards and banks are offering

All the major credit card companies and banks have worked out deals with merchants so they can offer discounts or other perks to their card members. Most of these are available at special sites such as bonuspointsmall.com (American Express (NYSE:AXP)), additup.bankofamerica.com (Bank of America (NYSE:BAC)) or citi.com/thankyou (Citigroup (NYSE:C)). Make sure you visit these sites first, where you’ll find discounts ranging from 5% to 30%.

American Express makes it even easier with its newly-released inSite browser app. Download the app from insite.americanexpress.com, then shop the way you always do. What you’ll notice is that the American Express logo will start popping up in your search results – that’s the inSite app letting you know every time there is an American Express offer available for that exact item. You’ll find bonus point offers, discounts or even free shipping.

3. Make sure your credit cards are paying you back

With the onslaught of TV ads and browser banners that advertise credit card rewards, it can be tiring to find a perfect fit. But if you stick to one card for all your holiday spending, you can rack up enough points to buy yourself a gift once the holiday mayhem has subsided.

Limited-Time Credit Card Promotions

Some credit card issuers like Discover (NYSE:DFS), Citi (NYSE:C) and American Express (NYSE:AXP) have limited-time promotions for some of their credit cards to coincide with the year-end shopping season.

Discover More Card – $100 Cashback Bonus (read our review of Discover More Card – $100 Cashback Bonus)  is offering a Double Cashback Bonus from 15 November till December 31, 2010, on any Internet purchases, up to a maximum of $1,000 in purchases. So instead of getting just 1% cashback, you will earn 2% cashback when you shop online this holiday season. With this card, you can also get 5% cashback in restaurants, department stores and clothing store purchases, up to $300 spent on such purchases till December 31, 2010. Click here to go to the official Discover website for more details.

Citi Forward Card – $100 Statement Credit (read our review of Citi Forward Card – $100 Statement Credit) is a time-limited offer only for new sign-ups. It gives you a $100 statement credit after you make at least $500 in purchases that are not returned within the first 3 months of account opening. Click here to go to the official Citi website for more details.

American Express Gold Card (read our review of American Express Gold Card) has a special offer for those who sign up before December 28, 2010: You get a Flip UltraHD Camcorder when you spend $2,000 during your first 3 months of being a cardmember. A quick check on Amazon.com shows that this Flip UltraHD Camcorder retails for around US$180. Click here to go to the official American Express website for more details.