The best cards for holiday purchases
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Update: Some offers mentioned below are no longer available. View the current offers here – Chase Freedom Flex
Editor’s note: This is a recurring post, regularly updated with new information.
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 our top picks for your gift purchases during the holiday season.
Best Cards for Holiday Purchases
- Capital One Venture Rewards Credit Card: Best for flexible rewards
- Chase Freedom Flex: Best for rotating rewards
- Amazon Prime Rewards Visa Signature: Best for Amazon purchases
- Bank of America® Premium Rewards® credit card: Best for cash back on online shopping
- Citi® Double Cash Card: Best for simplicity
The information for the Amex EveryDay Preferred, the Amazon Prime Visa Signature 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.
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This card is a great option for those who want to earn flexible rewards without worrying about different spending category bonuses. The Venture card gives you at least 2x miles per dollar spent on purchases.
There’s also flexibility in how you redeem those miles you earn. You can use your miles to “pay” yourself back for travel booked in the past 90 days. TPG values Capital One miles at 1.4 cents each, so that’s a solid 7% return on those purchases. You can also transfer your miles to 13 airline and two hotel partners, book new travel, redeem for gift cards and redeem as a statement credit for eligible purchases, although your best option is to transfer them to airline or hotel partners.
Chase Freedom Flex
Just because Amazon isn’t on the list of Chase Freedom Flex bonus categories in the fourth quarter of 2020 doesn’t mean the card isn’t worth considering for your holiday purchases. Whether you’re more of a traditional brick-and-mortar shopper or prefer buying online, you’ll enjoy 5% back on purchases at Walmart and PayPal with the Chase Freedom Flex in the fourth quarter of 2020.
While 5% in cash back sounds great, experienced points and miles hobbyists know that the Chase Freedom Flex is not simply a cash-back card. When it’s paired with a premium Chase card that earns full Ultimate Rewards points — such as the Chase Sapphire Preferred Card or the Chase Sapphire Reserve — that cash back can be converted to much more valuable Ultimate Rewards points, which you can transfer to partners including United Airlines and Hyatt. That’s why combining the Freedom Flex (or Chase Freedom Unlimited) with 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 or by using PayPal, pay with the Chase Freedom Flex and also have the Sapphire Preferred or Sapphire Reserve, you’ll take home 7,500 Ultimate Rewards points, worth $150 based on TPG’s most recent valuations. If you’re keeping score at home, that’s a return of 10%, not to mention any additional bonuses for going through an online shopping portal.
The Chase Freedom Flex offers new cardholders a $200 cash back bonus after you spend $500 in the first three months with the card, and you’ll also get 5% back on the first $12,000 spent at grocery stores in the first year.
If you’re a regular Amazon shopper, this is the card for you — with no annual fee (though it requires an Amazon Prime membership at $119 a year). As Black Friday and Cyber Monday fast approach, you want a card that gives you the biggest bang for your holiday shopping buck. The Amazon Prime Visa offers 5% cash back on all Amazon and Whole Foods purchases, 2% on restaurant, gas station and drug store purchases, and 1% back on everything else. Cardholders’ loyalty to Amazon is rewarded with best-in-class earnings on purchases at its website and grocery store chain. You’ll be able to rack up cash back on more than 12 million products on Amazon and more than 5,000 items at Whole Foods. That gives you a lot of choices when it comes time for gift giving.
If you have the ability to park a significant amount of your investments and savings at Bank of America or Merrill, the Bank of America® Premium Rewards® credit card is a great option for holiday purchases. While the card comes with a reasonable (though not earth-shattering) earning rate of 1.5 points per dollar spent on all purchases (which can be redeemed at the rate of 1 cent per point), the real value of this card comes when 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 holiday gifts.
The Bank of America® Premium Rewards® credit 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 of account opening — these points are worth $500. Additionally, the card comes with an up to $100 statement credit towards TSA PreCheck, Global Entry and an annual up to $100 statement credit towards airline incidentals.
The final card on my list earns a spot for a couple of reasons. The first reason is simplicity; the Citi Double Cash Card offers a flat 1% back on every purchase plus another 1% back as you pay your bill (an up to 2% total return). 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.
However, if you’d like the option to chose between cash or points you’re in luck because Citi refreshed the card so that holders can do just that. All you have to do is hold another Citi card that earns ThankYou points so that you can transfer them over at 1:1 ratio.
Holiday spending can also be an excellent way to meet the minimum spending requirement on a new credit card. There are a lot of great offers to consider. Plus, some of your current credit cards may offer a calendar-year bonus and additional benefit for spending a certain amount of money on the card. We have a list of the latest bonuses, so check it out to see if there are any you might want to work toward this holiday season. Especially if you’re close to obtaining a bonus, you’ll want to plan to reach the given spending threshold before Dec. 31, 2020.
In addition to ensuring that you’re using the right credit cards, it’s critical that you go through an online shopping portal to maximize your earnings. The best thing about online shopping portals is that you don’t have to use a specific card for the purchases. My favorite site for deciding which portal to use is CashBackMonitor.com, as it will compare the earning rates for a given merchant across a variety of different shopping portals. I also like to download the browser extension of my preferred shopping portal so that I never forget to activate the extra earnings.
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 checkout, so you may have a card that earns more desirable rewards or will help you hit a calendar year threshold bonus. Remember 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.
Additional reporting by Benét J. Wilson.
Featured image via Shutterstock.
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