The best credit cards for buying clothes
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The typical U.S. 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.
No matter what your income level, clothing purchases likely make up a noteworthy part of your household budget, and you should maximize your return on this spending by using the right rewards credit card.
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If travel is your main redemption objective, as it is for many TPG readers. there are two cards that stand out — the Chase Freedom Unlimited and the Chase Freedom (No longer open to new applicants). These two cards offer returns ranging from 1.5% cash back to 5% cash back that can be effectively become Ultimate Rewards points when paired a Chase Sapphire card, such as the Chase Sapphire Preferred Card, the Chase Sapphire Reserve or the Ink Business Preferred Credit Card.
The information for the Chase Freedom has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.
But if you’re looking to maximize your return no matter the form — meaning cash back, points or discounts — there are some more (or at least similarly) rewarding avenues to consider. Let’s look at options across the spectrum, including typical rewards credit cards, store cards and gift cards.
Best credit cards for shopping of 2020
- Chase Freedom: Best for rotating rewards
- Discover it Cash Back: Best for cash back match
- Bank of America® Cash Rewards credit card: Best for Bank of America customers
- Citi® Double Cash Card: Best for everyday rewards
- Chase Freedom Unlimited: Best for flat-rate earning and transferring
Comparing the best credit cards for shopping
You’re likely not going to find a bonus category on cash back credit cards or travel credit cards called “clothing.” 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 1.5 points/miles per dollar or 1.5% cash back on clothing purchases.
Here are our picks, ranked by the highest return on spend based on the average U.S. household spend on clothing.
|Credit Card||Best for||Earning Rate||Return on spend*||Bonus Value**||Annual Fee|
|Chase Freedom||Rotating categories||5% cash back on quarterly bonus categories on the first $1,500 in purchases, (up to $75 per quarter); 1% unlimited cash back on all purchases||$75 per quarter||$150 ($300, if paired with an Ultimate Rewards card)||$0|
|Discover it Cash Back||Cash back match||5% cash back on rotating quarterly bonus categories on the first $1,500 in purchases each quarter you activate (up to $75 per quarter); 1% unlimited cash back on all purchases; cash back match at end of first 12 months||$75 per quarter||Cash back match at the end of the first 12 months||$0|
|Bank of America Cash Rewards||Bank of America members||3% cash back on bonus categories such as online shopping on the first $2,500 in combined choice category/grocery store/wholesale club purchases each quarter, then earn 1%||$54||$200||$0|
|Citi® Double Cash Card||Everyday rewards||2% cash back (1% when you buy, 1% as you pay) with no limit on cash-back earnings||$36||N/A||$0|
|Chase Freedom Unlimited||Everyday rewards||1.5% unlimited cash back on purchases||$27||$200||$0|
*Return on spend is based on the average U.S. household spend on clothing of $1,800 a year.
This no-annual-fee 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. If you can do that, you’ll earn up to 5% that quarter on purchases up to $1,500 (activation required). 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 has included mobile wallets as a bonus category in years past. Typically, Chase tends to offer 5% cash back at department stores during Q4, which is unsurprising, given it’s the holiday season.
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 if you max out the bonus category each quarter. ($1,500 in purchases x 5x points = 7,500 UR points per quarter. Those points are worth $150, according to TPG valuations.)
By transferring your points to a UR card, you can make the effective redemption value for clothing purchases either 2 cents (at 1% back) or 10 cents (at 5% back).
Finally, the welcome bonus may seem low, at $150 cash back after you spend $500 in the first three months of account opening, but if you transfer that to a UR card then that’s 15,000 Ultimate Rewards points.
The Discover it is one of our best cash back credit cards. 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 on purchases up to $1,500 in purchases each quarter. Beginning July 1, 2020 through Sept. 30, 2020, those categories include purchases made with PayPal and from Oct. 1 through Dec. 31 you can earn 5% cash back on Amazon.com, Walmart.com and Target.com — all stores where you may purchase clothing.
Unlike with Chase Freedom, there is no points program to which you can 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.
If your biggest priority is saving money rather than collecting points, this card could be the one for you. You can earn 3% cash back up to $2,500 in combined purchases per quarter on the bonus category of your choice. One of the category options that relates to clothing is online shopping, making this a great card for those who prefer the web over brick-and-mortar stores.
If you don’t have a lot of shopping coming up, you can change your bonus category each month to match your spending better, picking other categories such as gas or travel. However, if you max out the 3% on online shopping, you could save $54 on the $1,800 spent annually on clothes.
While this card offers high earnings, cardholders will get more value out of it if they are a Bank of America customer who is eligible for its Preferred Rewards program. For instance, Preferred Rewards members can earn earn up to 5.25% cash back instead of 3%. That would bring your annual savings on clothing to $94.50. Learn more about it here.
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, with no cap on earnings. TPG values Citi ThankYou points at 1.7 cents per dollar, so if you spent $1,800 per year on clothes, then you could save $606 annually with this card on clothes alone. That’s not too shabby for a no-annual-fee card.
You can earn 1.5% cash back on eligible purchases with this card, including clothing. Like the name of the card says, the cash back is unlimited. If you spend the average of $1,800 a year on clothes, you could effectively save $27 annually. However, 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, which is about 5,670 UR points, which TPG values at $113.
Like Chase Freedom, you’ll also earn a $200 bonus with Freedom Unlimited when you spend $500 on purchases during your first three months after account opening. There is also no annual fee.
Related reading: The best credit cards for everyday spending
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 but only at that store
Regarding number two, 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 mess with your credit score.
That being said, there are a few closed-loop cards that are worth considering. 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.
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 its 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 cobranded 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 purchases (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 beyond 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 U.S. 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 only 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.
You’ll earn 3 points per dollar spend at Nordstrom, Nordstrom Rack, HauteLook and Trunk Club. Once you’ve collected 500 points, you’ll get a $5 Nordstrom Note towards a future purchase. Every 500 points, the note increases by $5, so at 2,000 points ($670) you’ll get a $20 note. Nordstrom cardmembers also earn 2 points on entertainment and dining, have access to free basic alterations and an annual $100 alteration benefit that increases with status.
If you’re a big Nordstrom shopper, this card could be quite rewarding for no annual fee.
Related reading: The best store credit cards of 2020
The information for the Amazon Prime Visa Signature card, Gap Visa, TargetRed card, Nordstrom Visa card has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.
Gift Card Spending
One other option to consider is using a credit card that offers big bonus returns at stores that sell gift cards to stores that sell clothing. You could use your Blue Cash Preferred® Card from American Express, for example, to purchase gift cards to your favorite clothing stores at a U.S. supermarket and save 6% (on the first $6,000 in purchases per year; then 1%).
Related reading: Best credit cards for buying gift cards
Here are a couple of other cards that offer rewards where gift cards are commonly found:
Earn 4x Membership Rewards points at U.S. supermarkets (on the first $25,000 in purchases each calendar year; then 1x), where you can usually buy gift cards. Just remember that superstores such as Walmart and Target are not included in the supermarket bonus category. This card also earns 4x points restaurants worldwide and 3x on flights booked directly or with Amex Travel.
New cardmembers can earn 60,000 Membership Rewards® points after you spend $4,000 on eligible purchases with your new Card within the first 6 months which is worth $1,200 according to TPG valuations. The card has an annual fee of $250 (see rates and fees).
You’ll earn 5% back on office supply store purchases (on up to $25,000 in spend each account anniversary year). Office supply chains such as Staples are known for having a large selection of gift cards available for purchase, including many retailers that won’t earn rewards with other cards (meaning gift cards are the best way to earn rewards on those purchases).
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 90 days of purchase.
- Chase Freedom — offers $500 in coverage per item and up to $50,000 a year. Claims must be filed within 90 days of purchase
- Citi® Double Cash Card — offers $10,000 in coverage per item and up to $50,000 per calendar year. Claims must be filed within 90 days of purchase.
Relate reading: Best credit cards for purchase protection
Your return isn’t going to be incredible on clothing purchases, unless you’re really out of the norm. The typical household will save up to $75 on 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.
Related credit cards guides
- Best travel credit cards
- Best cash-back credit cards
- Best airline credit cards
- Best hotel credit cards
- Best gas credit cards
- Best credit cards for groceries
- Best credit cards for entertainment spending
- Best credit cards for everyday spending
- Best credit cards with no foreign transaction fees
For rates and fees of the Amex Gold Card, click here.
Additional reporting by Liz Hund.
Featured photo by Thomas Barwick/Getty Images.
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