The best cards for holiday purchases
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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 our top picks for your gift purchases during the holiday season:
My first pick earns the top spot on the list because of three popular retailers: Amazon.com, Target and Walmart.com. All three are on the bonus category list for the card this holiday season. This means you can earn 5% cash back on up to $1,500 in combined purchases at Amazon, upon enrollment (as well as at wholesale clubs) between now and Dec. 31, 2019.
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 Cash Back card holders get all their cash back matched at the end of the first year they have the card. So, new cardholders can earn up to 10% cash back on up to $1,500 in combined purchases on Amazon.com, Target and Walmart.com between Oct. 1 and Dec. 31. Plus, earn 1% cash back on all other purchases.
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 Family. Amazon also sells gift cards to various retailers like Uber, Airbnb, 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.
The information for the Discover it Cash Back has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.
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 enjoy 5% back on purchases at department stores and when you pay on Chase Pay or with PayPal with the Chase Freedom in the fourth quarter of 2019. (Chase Freedom is no longer open to new applicants)
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 — 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 (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 department stores or use Chase Pay or PayPal, pay with the Chase Freedom 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 offers a sign-up bonus of $200 cash back after you spend $500 on purchases in your first three months from account opening.
The information for the Chase Freedom and Chase Freedom Unlimited has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.
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 but 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 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 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 — these points are worth $500. Additionally, the card comes with a $200 statement credit towards TSA PreCheck, Global Entry or 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. 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 recently 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 be an excellent way to meet the minimum spending requirement on a new credit card. There are lots of great offers to consider. Plus, some of your current credit cards may offer a calendar-year bonus 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 bonuses 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, 2019.
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 Liz Hund.
Featured image via Shutterstock.
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