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During the holiday shopping season, you may have a long list of presents to buy for your family and friends. 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 during the 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 during the holiday season:
1. Discover it
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 was the card to use for holiday purchases at Amazon since it included the shopping website as one of its bonus merchants in the fourth quarter. But in 2017, it’s Discover that has put Amazon (and Target as well) on its bonus category list, which means you can earn 5% cash back on up to $1,500 in combined purchases at Amazon between October 1 and December 31.
But if you’re just signing up for the card right now — or have gotten it in the last 12 months — this deal gets even better. That’s because new Discover it cardholders get all their cash back doubled at the end of the first year they have the card. So the 5% you’ll earn during the fourth quarter at Amazon is actually 10% for new cardholders.
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. Amazon also sells gift cards to various retailers like Starbucks and Old Navy.
Of course, you can always give a friend or family member a gift card to Amazon.com itself; just be aware that Amazon gift cards cannot be used to purchase most retail gift cards on the site.
Just because Amazon isn’t on the list of Chase Freedom bonus categories this year doesn’t mean the card isn’t worth considering for your holiday purchases. If you’re more of a traditional brick-and-mortar shopper, you’ll find you can get 5% back on purchases at both department stores and Walmart with the Chase Freedom in the 4th quarter of 2017.
While 5% in cash back sounds great, 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 or the Chase Sapphire Reserve — the cash back can be converted to much more valuable Ultimate Rewards points, which you can transfer to partners like United and Hyatt. That’s why combining the Freedom (or Freedom Unlimited), the Sapphire Reserve and the Ink Business Preferred Credit Card creates 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 Walmart and/or most department stores, pay with the Chase Freedom and also have the Sapphire Preferred or Reserve, you’ll take home 7,500 Ultimate Rewards points, worth $165 based on TPG’s most recent valuations. If you’re keeping score at home, that’s a return of 11%, not to mention any additional bonuses for going through an online shopping portal like Ebates.
The Chase Freedom offers a 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!
3. 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 soon-to-be-converted Citi Hilton Honors 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 $500 (subject to an annual maximum of $2,500). The program has awarded more than $2 million worth of refunds annually, 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, in which case it’s a decent alternative to the more expensive Platinum Card from American Express), the biggest pro to using the Premier Rewards Gold Card from American Express is its purchase protection. Many cards carry this benefit, but the Premier Rewards Gold Card provides $10,000 in protection per incident and up to $50,000 for all incidents in a calendar year. 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 Amex Platinum, 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.
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.
If you have the ability to park a significant amount of your investments and savings at Bank of America or Merrill Lynch, the Bank of America Premium Rewards card is a great option for holiday purchases. While the card comes with a reasonable but not earth-shattering earning rate of 1.5 points per dollar spent on all purchases (which can be redeemed to cover any travel expense), the real value of this card is realized if you can make it to either the Platinum or Platinum Honors award tiers in Bank of America’s separate Preferred Rewards banking program. By doing so, the everyday earning rate on this card can jump all the way to 2.625 points for every dollar spent, making it a terrific choice for those holiday gifts.
This brand-new card is currently offering a sign-up bonus of 50,000 points if you make at least $3,000 in purchases in the first 90 days — points can be redeemed for a $500 statement credit toward travel purchases.
The final 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 and the complexity of booking award tickets, many shoppers may simply want some money back on purchases.
The card carries a 0% introductory APR on balance transfers for 18 months then 14.74-24.74%. 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).
Honorable Mention: Amex EveryDay Credit Card
Another great American Express option for holiday purchases is the Amex EveryDay Credit Card from American Express. For starters, it allows you to earn incredibly valuable Membership Rewards points, including 2x points at US supermarkets (up to $6,000 in yearly purchases; then 1x). 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 20 or more transactions in a billing period, you’ll earn 20% extra points on those purchases. Given the array of expenses around the holidays, hitting this threshold shouldn’t be too hard.
The card is currently offering a sign-up bonus of 10,000 Membership Rewards points after you use your new card to make $1,000 in purchases within the first three months.
As you can see, there are many ways to make the most of your purchases during the 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!