It’s official: The holiday gift-buying frenzy has begun. If you’re feeling a little woozy about all the money you’re laying out, remember that one of the best ways to offset those costs is using the right credit card. After all, racking up big rewards brings the effective price of each gift down – plus, you’ll end up with a little something for yourself.
Not sure which card is best for the items on your to-buy list? Here are the Nerds’ top picks for every purchase you’ll make this December:
If you’re buying books or DVDs: Chase Freedom® - $200 Bonus
Shopping for books or DVDs (and lots of other things, actually) usually means spending a lot of time on Amazon.com. If this sounds familiar, you’ll want to use the Chase Freedom® - $200 Bonus this holiday season. Until Dec. 31, 2014, you’ll earn 5% cash back at Amazon.com, Zappos.com, and select department stores, up to $1,500 in combined spending. Plus, you’ll get unlimited 1% cash back on all other purchases.
Featured 5% categories change every quarter, so if you pick this card you’ll have a lot of opportunities to earn extra cash back throughout the year with this card. Also, it comes with a modest signup bonus: Get a $200 Bonus after spending $500 on purchases in your first 3 months from account opening. All these great perks come at an annual fee of $0, which means the Chase Freedom® - $200 Bonus is a card you’ll want to keep in your wallet for the holidays and beyond.
If you’re buying clothes: Discover it®
Do you need to buy a gift for a fashionista this year? If so, the Discover it® is a great pick. With it, you’ll earn 5% cash back on online and department store shopping until Dec. 31, up to $1,500 in combined spending. You’ll also earn 1% cash back on all other purchases.
But what’s really great about this card is that you’ll have access to Discover Deals, one of the best rewards malls on the web. It provides the opportunity to earn extra cash back, in-store discounts or statement credits on select purchases. This makes it the ideal card for most of your online and in-store clothing purchases.
Like the Chase Freedom® - $200 Bonus, the Discover it® charges an annual fee of $0, so it’s another rewarding and economical choice.
Nerd note : In the event that you go a little overboard with your holiday shopping, the Discover it® also provides 0% on purchases and balance transfers for 14 months, and then the ongoing APR of 10.99% - 22.99% Variable. This means you can stretch out your payments a bit, while still avoiding interest charges. Talk about a bargain!
If you’re buying gift cards: Blue Cash Preferred® Card from American Express
It might seem strange that we’re recommending the Blue Cash Preferred® Card from American Express for gift card purchases, but you’ll probably figure out where this is going quickly. First, the basics: With this card, you’ll earn 6% cash back at grocery stores (up to $6,000 spent annually), 3% back at gas stations and department stores, and 1% cash back everywhere else.
Given that so many grocery stores now sell gift cards to dozens (sometimes hundreds) of different retailers in their “gift card malls,” the Blue Cash Preferred® Card from American Express is a great choice for stopping by your local supermarket and stocking up. You’ll earn the 6% back on your spending, and since you’re getting it in the form of cash back, it’s easy to turn around and use your rewards for other gifts. Win-win!
You should also know that the Blue Cash Preferred® Card from American Express comes with a signup bonus: Get 100 Reward Dollars, redeemable for a $100 statement credit, after you make $1,000 in purchases with your new Card in the first three months. Plus, get one year of Amazon Prime after you sign up for a new membership with your Card and meet the spending requirement in the same time period. It does charge an annual fee of $75, but if you’re spending more than $27 per week at the grocery store throughout the year, you’ll make this back in rewards in no time.
If you’re buying tickets to an event: Citi ThankYou® Preferred Card — Earn 20,000 Bonus Points
If you’d rather get your loved one an experience than a thing this holiday season, consider using the Citi ThankYou® Preferred Card — Earn 20,000 Bonus Points for dinner at a fancy restaurant and tickets to a show. In doing so, you’ll earn 2 ThankYou points for every dollar spent on dining out and entertainment and 1 ThankYou point per dollar spent on all other purchases.
We recommend that you use your ThankYou points to purchase gift cards or for cash equivalents – this is how you’ll get the most value out of each one. However, you can also redeem them for travel or merchandise if you want to.
In terms of a signup bonus, the Citi ThankYou® Preferred Card — Earn 20,000 Bonus Points offers a pretty nice one: Earn 20,000 bonus ThankYou® Points after $1,500 in card purchases within 3 months of account opening - redeemable for $200 in gift cards or other great rewards. Also, it charges an annual fee of $0* and provides access to other cool perks, like Citi Price Rewind and Citi Private Pass. In short, it’s a great card to keep on hand.
If you’re buying a big trip: Chase Sapphire Preferred® Card
Surprising a loved one with the trip of a lifetime is a great holiday gift idea. If you decide to go this route, consider booking with the Chase Sapphire Preferred® Card. You’ll earn 2 points per dollar spent on travel and dining in restaurants, and 1 point per dollar spent on all other purchases. Points are generally worth $.01 apiece, but if you book through Chase Ultimate Rewards, the value of each rises by 25%.
However, you’ll also have the option to transfer your points to participating frequent traveler programs at a 1:1 ratio. If you’re good at hacking frequent flyer awards charts, you could end up getting a lot more than $.01 out of each point.
If your travel surprise will take you overseas, the Chase Sapphire Preferred® Card has you covered. It charges no foreign transaction fee and comes chip-enabled.
Finally, you should know that the Chase Sapphire Preferred® Card comes with a stellar signup bonus: Earn 40,000 bonus points after you spend $4,000 in the first 3 months. It does charge an Introductory Annual Fee of $0 the first year, then $95, but most globetrotters will make up for this in rewards in no time. Happy holidays!
Purchasing holiday gifts image via Shutterstock
The post Best Credit Cards for Purchasing Your Holiday Gifts appeared first on NerdWallet Credit Card Blog.
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