The holiday shopping season is gearing up and credit card companies are already starting their red and green and gift card promotions.
On Oct. 1, cash back cards with rotating bonuses began offering 5 percent cash back at retailers including Amazon, Costco, Sam’s Club, Macy’s and more — perfect for snapping up gifts for family and friends.
If you use a cash back card for all your holiday spending and choose only stores that qualify for the extra bonus, you could rack up a substantial cash infusion by the time 2017 rolls around.
According to a recent survey by the advertising company Rubicon, for example, the average holiday shopper plans to spend around $1,175 on holiday spending. That could net you an extra $58.75 in rewards if you use a credit card that offers 5 percent cash back on rotating-category purchases.
Depending on your spending, here are six cash back credit cards for your holiday shopping:
Best card for online bargain shoppers:
The Discover it Cash Rewards credit card. Beginning Oct. 1, the Discover it Cash Rewards card (see review) offers 5 percent cash back on up to $1,500 in purchases from Amazon.com or from any department store. You can also earn 5 percent cash back from Sam’s Club if you prefer to do some of your holiday shopping at your local wholesale club. However, unlike the Chase Freedom card, the Discover it Cash Rewards card isn’t accepted at Costco. Oh, and your first-year cash back is matched by Discover.
Best card for wholesale club aficionados:
The Chase Freedom card. If you prefer to shop at Costco, Sam’s Club or BJ’s Wholesale Club, the Chase Freedom card (see review) is the card to use as you’re decking your halls and filling your basket with gifts. Cardholders are eligible to earn 5 percent cash back on up to $1,500 in wholesale club purchases. That’s a better deal than even the Costco Anywhere Visa from Citi. The Citi card offers only 2 percent cash back on Costco purchases. In addition, the Chase Freedom card offer 5 percent cash back on department store purchases and drugstore purchases through the end of December. Cardholders have until Dec. 14 to sign up to get the 5 percent bonus.
Best card for bookworms, techies, sports fans and fashionistas:
The U.S. Bank Cash+ Credit Card. If you want to flaunt your literary bent by giving away a curated selection of books — or if you want to wow your gift recipients with the latest fashions or gadgets — the U.S. Bank Cash+ credit card (see review) may be perfect for you. Unlike most cash back credit cards, the U.S. Bank Cash+ card lets you choose your rotating bonus categories. For instance, savvy holiday shoppers can choose to get 5 percent cash back on up to $2,000 per quarter from two categories of your choice, including select bookstores; electronics stores such as Best Buy and Apple; clothing stores such as Eddie Bauer, Gap and Forever 21; sporting goods stores and more. So choose categories to get the most back for your holiday haul.
Best card for gift card purchases:
Blue Cash Preferred card from American Express. If you prefer to give gift cards instead of merchandise and don’t mind paying an annual fee on your credit card, you can’t go wrong with the Blue Cash Preferred card ( see review) from American Express — especially if you have a large family and already spend a lot on groceries. This card offers an industry-leading rewards rate of up to 6 percent cash back on grocery store purchases, allowing you to stock up on gift cards on one of your grocery runs. If you use your card to buy, say, $500 worth of gift cards, you’ll net an extra $30 in cash — enough to purchase your own holiday gift item.
Best cash-back card to use for travel:
Blue Cash Everyday from American Express. If you haven’t bought your holiday tickets yet and are in the market for a new cash-back card, you may want to consider either one of American Express’s blue cash cards. Both the Blue Cash Everyday card (see review) and the Blue Cash Preferred card are offering new cardholders 5 percent cash back on up to $4,000 in travel purchases. The promotion lasts only for the card’s first six months, though, so be sure to book your travel early to get the maximum amount of cash back. Heading home for the holidays maybe?
Best cash-back card to use for holiday road trips:
Sam’s Club Consumer MasterCard. Accounts opened between Oct. 1 and Nov. 12 will earn double cash back for the first 90 days. This means new cardholders will get 10 percent cash back on gas purchases, 6 percent cash back on travel and dining and 2 percent cash back at Sam’s Club and on all other purchases at eligible merchants. (If you’re hitting the road to visit grandma at Thanksgiving, this card may be a smart addition to your wallet.)
Reminder: Don’t forget to opt in
Finally, if you do plan to use a cash back card for holiday purchases, don’t forget to opt into the bonus categories before you shop. Cash back cards with rotating bonuses typically require you to affirmatively opt in to receive the 5 percent bonus every quarter.
Want more financial advice for the holiday season? See “2016 holiday shopping and credit guide.”