The Best Credit Cards for Buying Clothes
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Update: Some offers mentioned below are no longer available. View the current offers here – Premier Rewards Gold Card from American Express, Chase Freedom Unlimited, Hilton Honors American Express Ascend Card, Citi® Double Cash Card
The typical US household spends about $1,800 a year on clothing. If this statistic leaves you thinking “that’s not me” either because the number strikes you as too high — or too low — know this: Households with annual incomes below about $70,000 spend much less than the yearly average, according to consumer expenditure data from the Bureau of Labor Statistics. On the other hand, upper-income households tip the scales in the opposite direction. Households reporting annual incomes of $127,000 or more spend about $2,500 a year on clothing.
This is all to say that clothing purchases likely make up a slightly meaningful or better portion of your household budget, and you can maximize your return on this spending by using the right rewards credit card.
If travel is your main redemption objective — as it is for many TPG readers — sticking with a card like the Chase Sapphire Reserve or the Capital One Venture Rewards Credit Card when buying clothes could offer a return of 2 cents or more per dollar spent to be used toward travel purchases.
But if you’re looking to maximize your return no matter the form — meaning cash back, points or discounts — there are, perhaps, some more (or at least similarly) rewarding avenues to pursue. Let’s look at options across the spectrum, including typical rewards credit cards, store cards and gift cards.
Rewards Credit Cards
You’re likely not going to find a bonus category on a cash-back or travel credit card called “clothing.” But there are card categories that include purchases at stores that sell clothing, though you may have to cobble together a few cards to maximize your rewards on this type of spending. For this list, we’re looking at rewards credit cards that pay at least 2 points/miles per dollar or 2% cash back on clothing purchases.
Amex EveryDay Preferred Credit Card from American Express
You’ll have to perform a bit of mathematical gymnastics to arrive at a return of better than 2% with this card. EveryDay Preferred offers 3x points at US supermarkets (up to $6,000 in purchases per year, then 1x) and 2x points at US gas stations. All other eligible spending earns 1 point per dollar.
Clothing fits into the everyday spending category, but there are two ways to boost the redemption value. The first is by redeeming your Membership Rewards points by transferring them to an airline partner. This could get you great value, perhaps even better than the 1.9 cents TPG estimates Membership Rewards points to be worth. The second it to earn a 50% transaction bonus with EveryDay Preferred for making 30 or more purchases in a billing period. That could boost the value of each point to 2.85 cents.
Amex is offering a welcome bonus of 15,000 points after you spend $1,000 in purchases within the first three months. That bonus is worth $285 based on TPG’s valuations, and the annual fee is $95.
You can earn a big bonus of 3x points on all clothing purchases when you use a mobile wallet like Apple Pay to complete your transaction. (Indeed, you’ll earn 3x points on all mobile wallet transactions with this card.) That means, of course, the retailer must accept mobile wallet payments for this to work. Since those points are worth 1.5 cents each when redeemed for travel purchases booked directly through the US Bank “Rewards Center,” your return could be up to 4.5 cents per dollar spent on clothing purchases.
Along with mobile wallet spending, you’ll also earn 3x points on travel purchases. All other qualified spending earns 1 point per dollar.
One downside: This card is available exclusively to US Bank customers. If you don’t have a deposit account or other qualifying relationship with this bank, you’re perhaps out of luck. Altitude Reserve also comes with a substantial $400 annual fee, but you’ll get many of the perks and bonuses other premium travel cards offer, including:
- A welcome bonus of 50,000 points worth $750 on travel when you spend $4,500 in eligible purchases within the first 90 days of account opening
- Up to $325 in annual statement credits for eligible net travel purchases
- 12 Gogo Inflight WiFi passes per year
- Priority Pass lounge access
- Reimbursement once every four years on a TSA PreCheck or Global Entry application
This fee-free card looks deceptively meager when it comes to rewards. On clothing, you’ll earn just a 1% return unless you can catch a rotating category that covers some clothing purchases. Then you’ll earn up to 5% that quarter on purchases up to $1,500. It’s not a given that those quarterly categories will be valuable for someone on the hunt for a new pair of pants, but Chase included mobile wallets as a bonus category earlier this year.
If you plan to primarily redeem your rewards in the form of cash back, know that you’ll only be able to earn a maximum of $75 per quarter on the bonus categories ($1,500 in purchases at 5% cash back).
If, on the other hand, you pair the card with another Chase credit card that’s part of the Ultimate Rewards program and transfer the Freedom points to that card, you can more than double the annual value of rewards. ($1,500 in purchases at 5x points equals 7,500 UR points per quarter. Those points are worth $157.50, according to TPG valuations. That’s $630 per year.)
By transferring your points to a UR card, you can make the effective redemption value for clothing purchases either 2.1 cents (at 1% back) or 10.5 cents (at 5% back).
Finally, don’t expect a big welcome bonus. Earn $150 cash back after you spend $500 on purchases during your first three months after account opening.
Chase Freedom Unlimited
You can earn 1.5% cash back on all eligible purchases with this card, including clothing. Just like with Chase Freedom, if you pair this card with a card that earns Ultimate Rewards, you can boost the redemption value. In this case, you could earn points worth 3.15 cents each per dollar spent.
Like Chase Freedom, you’ll also earn a $150 bonus with Freedom Unlimited after you spend $500 on purchases during your first three months after account opening. Also like Chase Freedom, there is no annual fee.
Citi® Double Cash Card
Citi Double Cash Card offers a two-tiered bonus: 1% when you buy, 1% as you pay. Pay on time and in full and you’ll earn 2% cash back on all spending, including clothes shopping. This card charges no annual fee.
Discover it® Cash Back
Like Chase Freedom, you’ll earn 1% cash back on all other purchases with the Discover it Cash Back but when you enroll every quarter you can earn 5% cash back on rotating categories each quarter on purchases up to $1,500. Beginning October 2018 through December 2019, those categories include purchases at Amazon.com and at wholesale clubs, two potential places to shop for clothes.
Unlike with Chase Freedom, there is no points program to transfer your rewards, so the maximum you can earn is a 5% return. However, Discover will match your cash back at the end of your first year of card ownership. That should get you a boost on one year of spending to at least 2%. This card charges no annual fee.
Store Credit Cards
When we talk about store credit cards, we’re really talking about two different things:
- Store cards that pay a big bonus for shopping at that store and allow you to use that card elsewhere and earn rewards.
- Store cards that pay a big bonus for shopping at that store and nowhere else.
Regarding No. 2, we usually advise people to steer clear of this type of card, as closed-loop cards — as they’re called — tend to charge high APRs and come with low credit limits, which really could monkey with your credit score.
That being said, there are a few closed-loop cards that are worthwhile to consider. Here we look at the best of both types of store cards, again with the aim of earning a return of 2% or better on clothes spending.
Amazon Prime Rewards Visa Signature Card
This is one of those store cards that has the potential to earn a bunch of rewards when you’re not shopping at the online retailer. But it’s best payback is on shopping at Amazon.com, where you can buy everything from books to back massagers to, yes, clothes. Earn 5% cash back on all purchases at the virtual big box store.
There’s no cap on the amount of rewards you can earn, and you can redeem your rewards to pay for all or part of your Amazon purchases. You can also redeem for cash back, gift cards or travel. New cardmembers receive a $70 Amazon.com gift card instantly upon approval.
The Prime Rewards card also pays 5% cash back at Whole Foods Market, 2% back at restaurants, gas stations and drugstores and 1% back on all other purchases.
While this card technically is free to own, you have to be an Amazon Prime member to qualify. Prime memberships cost $119 a year.
This card is an odd example of a co-branded credit card that pays higher rewards on purchases made elsewhere. You’ll earn 2% cash back on all Costco and Costco.com purchases — including clothing — but 4% cash back on eligible gas (up $7,000 in purchases per year, then 1%) and 3% cash back on restaurants and eligible travel purchases. All other purchases earn 1% per dollar spent.
You’ll pay no annual fee, with your paid Costco membership. And while this is a cash-back card, you can’t earn statement credits or redeem your rewards at any time. Instead, you’ll receive a reward coupon annually, redeemable for cash or merchandise at US Costco warehouses.
You can technically use this card outside of Gap Inc. brand stores, but you probably shouldn’t as all purchases outside this brand will earn you 1 point. You’ll earn 5 points on in-store and online purchases at Gap, Old Navy, Banana Republic and Athleta. That’s a 5% return as each point is worth 1 cent.
Redemption comes in the form of a rewards card, which is automatically issued in $5 increments for every 500 points you earn. Those cards can only be used at Gap, Inc. brand stores and generally expire a month after issuance.
If you’re a Gap brand loyalist, this is a decent card to own — especially if you always pay your bill on time and in full. Otherwise, it’s probably wise to stay away.
Earn 3,000 points if you make an outside purchase in first 30 days. You’ll pay no annual fee.
This card, which comes in both debit and credit form, only works at Target stores and at Target.com. You’ll earn 5% savings on qualifying purchases at Target, including clothing. There is no mechanism for redeeming rewards— you’ll just save 5% at checkout. REDcard comes with no annual fee or welcome bonus.
Gift Card Spending
One other option to consider is using a credit card that offers big bonus returns at stores the sell gift cards to stores that sell clothing. You could use your Blue Cash Preferred card, for example, to purchase gift cards to your favorite clothing stores at a supermarket and save 6%.
Here are a couple of other cards that offer rewards where gift cards are commonly found:
Premier Rewards Gold Card from American Express
Earn 2x Membership Rewards points at US gas stations and US supermarkets, two places that might sell gift cards. Those 2x points equal a return of 3.8% on your gift card purchases. This card also earns 3x points on flights booked directly with the airline, 2x points at US restaurants and 1 point on all other eligible purchases.
New cardmembers can earn 25,000 Membership Rewards points after spending $2,000 in the first three months of cardmembership. That’s worth $475, based on TPG valuations. Pay no annual fee the first year, then $195.
Hilton Honors American Express Ascend Card
This card pays 6 points per dollar at US restaurants, US supermarkets and US gas stations, the latter two of which often sell gift cards, giving you another solid return of 3.6% on these purchases. You’ll also earn 12 points per dollar spent on Hilton stays and 3 points per dollar spent on all other purchases. The annual fee is $95. (See Rates & Fees)
Keep Purchase Protection Policies in Mind
One other nice benefit that many of the cards on this list offer is purchase protection, which covers eligible purchases against accidental damage or theft. Although all cards have a cap on the dollar amount of coverage they offer, since we’re talking about clothing purchases, you probably don’t have to worry about the caps unless you’re buying something really expensive.
Just remember to keep your original receipts and a credit card statement related to the purchase in case you do need to file a claim.
Note that there’s a limit on both individual claims and on the value of claims made annually with these cards:
- Blue Cash Preferred Card from American Express — offers $1,000 in coverage per item and up to $50,000 of coverage per year. Claims must be filed within 120 days of purchase.
- Chase Freedom — offers $500 in coverage per item and up to $50,000 a year. Claims must be filed within 120 days of purchase
- Citi Double Cash Card — offers $10,000 in coverage per item and up to $50,000 per year. Claims must be filed within 90 days of purchase.
- Premier Rewards Gold Card from American Express — offers $10,000 in coverage per item and up to $50,000 a year. Claims must be filed within 90 days of purchase.
Your return isn’t going to be incredible on clothing purchases — unless you’re really out of the norm. Figure the typical household will save $36 or more by buying clothing with the right credit card. But whether you’re trying to save points for a great trip or just to put a bit of cash back into your wallet, every little bit counts. Choosing one of these cards — or another that offers big rewards for everyday spending — can help you hit your goals.
For Rates & Fees of the Blue Cash Preferred Card, please click here.
For Rates & Fees of the Hilton Ascend Card, please click here.
WELCOME OFFER: $250 Cash Back Terms Apply.
TPG'S BONUS VALUATION: $250
CARD HIGHLIGHTS: New! Earn 6% cash back on select U.S. streaming services and 3% cash back on transit. Plus earn 6% Cash Back at U.S. supermarkets on up to $6,000 per year in purchases (then 1%) and 3% Cash Back at U.S. gas stations
- Earn a $250 statement credit after you spend $1,000 in purchases on your new Card within the first 3 months.
- New 6% Cash Back on select U.S. streaming subscriptions.
- New 3% Cash Back on transit including taxis/rideshare, parking, tolls, trains, buses and more.
- 6% Cash Back at U.S. supermarkets on up to $6,000 per year in purchases (then 1%). 3% Cash Back at U.S. gas stations. 1% Cash Back on other purchases.
- Over 3 million more places in the U.S. started accepting American Express® Cards in 2017 and 2018.
- Low intro APR: 0% for 12 months on purchases and balance transfers, then a variable rate, currently 14.49% to 25.49%
- $95 annual fee.
- Terms Apply.
- See Rates & Fees