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Update: The Chase Freedom bonus categories mentioned below are no longer available. View the current bonus calendar here
It’s December and the holidays are creeping ever closer, so if you haven’t reached the end of your shopping list, you’ll want to do so soon. To make sure you’re maximizing your holiday gift purchases, TPG Senior Points & Miles Contributor Nick Ewen is here with a list of the best credit cards to use.
The deals and discounts of Black Friday and Cyber Monday have come and gone, but you may still have a long list of presents to buy before the holiday season wraps up. Since you’re reading The Points Guy, I certainly hope that you’re giving careful consideration to which credit cards give you the best rewards and protections for these purchases. Today I want to go through my list of the top cards to use when you buy gifts this holiday season.
It’s important to note that this list is not exhaustive by any stretch but instead takes a look at a variety of cards that may appeal to numerous readers out there. Everyone has his or her own criteria for deciding which card is best for holiday shopping, so be sure to crunch the numbers based on your own unique situation.
That being said, here are my top picks for your gift purchases this holiday season:
My first pick earns the top spot on the list because of a single retailer: Amazon.com. For the last couple of years, the Chase Freedom card has included Amazon as one of its bonus merchants in the fourth quarter, meaning that you can earn 5% cash back on up to $1,500 in combined purchases at select locations this year.
However, this gets even better. Experienced points and miles hobbyists know that the Chase Freedom is not simply a cash-back card. When it’s paired with a premium Chase card that earns full Ultimate Rewards points (like the Chase Sapphire Preferred Card), the cash back can be converted to much more valuable Ultimate Rewards points that can be transferred to partners like United and Hyatt. When you combine the Freedom, Sapphire Preferred and the Ink Plus Business Card, you have a formidable points-earning machine.
So just how valuable is this card through the end of the year? If you drop exactly $1,500 at Amazon.com, pay with the Chase Freedom and also have the Sapphire Preferred, you’ll take home 15,000 Ultimate Rewards points, worth $315 based on TPG’s most recent valuations. If you’re keeping score at home, that’s a return of 21% on these purchases (not to mention any additional bonuses for going through an online shopping portal like Ebates).
Keep in mind that Amazon isn’t just for merchandise. You can also purchase groceries and other products through the site’s same-day delivery service Prime Now, and can also make the most of your baby purchases through Amazon Mom. I also just recently learned that Amazon sells gift cards to various retailers like Starbucks and Old Navy, and I can confirm that these purchases do count toward the enhanced bonus:
Of course, you can always give a friend or family member a gift card to Amazon.com; just be aware that Amazon gift cards cannot be used to purchase most retail gift cards on the site.
The Chase Freedom is currently offering an increased sign-up bonus of $150 cash back after you spend $500 on purchases in your first three months from account opening, so if this card isn’t currently in your wallet, now’s a great time to apply! The card also offers a 0% introductory APR for the first 15 months on purchases and balance transfers.
2. Just About Any Citi-issued Card
Another great option for these purchases doesn’t apply to a single card but rather the vast majority of cards issued by Citi. This is due to the issuer’s Price Rewind benefit. If you purchase an item with just about any personal card from Citi (including the Citi ThankYou Premier Card and the Citi Hilton HHonors Reserve Card) and register that purchase on the Price Rewind website, the program will track prices online with over 500 retailers and will refund you the difference if a lower price is found within 60 days. You can also submit a claim manually if you find a lower price on your own.
If the price on your purchased item does drop as the holiday approaches, you can get a refund of up to $300 (subject to an annual maximum of $1,200). The program has awarded $2 million worth of refunds through August of this year, though keep in mind that there are some exclusions, including (but not limited to):
- Consumable items
While it may not be the most rewarding card for most holiday purchases (unless you’re buying airfare), the biggest pro to using the Premier Rewards Gold Card from American Express is its purchase protection. There are many cards that carry this benefit, but the Premier Rewards Gold Card just upped the ante by raising its coverage tenfold — from $1,000 to $10,000 per occurrence. If you purchase an eligible item that is damaged, lost or stolen within 90 days of purchase, you can file a claim by visiting www.AmericanExpress.com/onlineclaim or by calling 1-800-297-8019.
Of course, this isn’t the only American Express card to offer this coverage; you’ll get identical protection on The Platinum Card from American Express, and others (like the Starwood Preferred Guest Credit Card from American Express) still offer the lower $1,000 worth of protection. However, the Premier Rewards Gold is significantly less costly than the Platinum Card and offers an array of other perks, many of which were just added earlier this year.
The card is currently offering a sign-up bonus of 25,000 Membership Rewards points after you spend $2,000 on purchases on your new card in your first three months of cardmembership. However, be sure to check the CardMatch tool to see if you have a targeted offer of 50,000 points or more.
Another great American Express option for holiday purchases is the Amex EveryDay Preferred Credit Card. For starters, it allows you to earn incredibly valuable Membership Rewards points, including 3x points at grocery stores (up to $6,000 in yearly purchases) and 2x points at gas stations. My local grocery store sells a variety of retail gift cards that can be an easy gift for those loved ones in your life who are hard to shop for. In addition, if you have 30 or more transactions in a billing period, you’ll earn 50% extra points on those purchases. Given the array of expenses around the holidays, hitting this threshold shouldn’t be too hard.
However, what makes this card even more compelling is its 0% introductory APR on purchases and balance transfers for 12 months (the rate varies from 13.24 – 23.24% afterward). While paying off your balance in full is my number one commandment for travel rewards credit cards, a 0% APR can be a great way to pay off a large gift purchase over time without incurring huge interest. Just be sure to pay off the balance before the promotional period is up, or you’ll more than negate the value of any points earned on the initial purchase.
The card is currently offering a sign-up bonus of 15,000 Membership Rewards points after you use your new card to make $1,000 in purchases within the first three months.
If you prefer a card with no annual fee, the Bank Americard Travel Rewards Credit Card is a great option for these purchases. In addition to the solid everyday earning rate of 1.5 points per dollar spent on all purchases (which can be redeemed to cover any travel expense), you can also earn an extra bonus of 10% if you have an active Bank of America checking or savings account and up to 75% bonus points with the bank’s Preferred Rewards program.
The card is currently offering an increased sign-up bonus of 20,000 points if you make at least $1,000 in purchases in the first 90 days — that can be redeemed for a $200 statement credit toward travel purchases.
The next card on my list earns a spot for a couple of reasons. The first is simplicity; the Citi Double Cash Card offers a flat 1% back on every purchase plus another 1% back as you pay your bill. While this return rate on everyday purchases doesn’t compare to the potential returns highlighted above, this is automatic, and it results in cold, hard cash in your pocket. With seemingly constant devaluations in the world of loyalty programs (American Airlines being the most recent culprit) and the complexity of booking award tickets, many shoppers may simply want some money back on purchases.
The second reason is the affordability. Like the Freedom, EveryDay Preferred and Bank Americard, the card carries a 0% introductory APR on balance transfers and purchases for 15 months then 13.24-23.24%. The card doesn’t impose an annual fee, though it also doesn’t come with any type of a sign-up bonus (unlike many other top travel rewards credit cards out there).
As you can see, there are many ways to make the most of your purchases this holiday season. However, every points and miles enthusiast has his or her own way of figuring out the best card to swipe at check-out, so you may have a card that earns more desirable rewards or will help you hit a calendar year threshold bonus. Remember too that many online purchases can become even more lucrative by going through an online shopping portal, which will give you additional points or miles (or cash back) just for clicking through the site!
What are your favorite cards for holiday shopping this year?
|Intro APR||Regular APR||Annual Fee||Foreign Transaction Fee||Credit Rating|
|0% for 15 months||14.24%-23.24% Variable||$0||3.00%||Excellent/Good|