Best Credit Cards for Holiday Shopping in 2020
This article was last updated Dec 30, 2019. Terms and conditions may have changed. For the most accurate information, please consult the issuer website.
Whether your holiday plans include hosting a large family dinner, taking a trip to visit friends or relatives or purchasing gifts for everyone you know, choosing the right credit card can help fund those activities. Depending on which card you choose, you have the potential to earn rewards on groceries and travel, or even finance big ticket items interest free for more than a year.
We’ll break down several credit cards to help you determine which card would be the most helpful based on your plans this holiday season.
In this article:
- Best for hosting holiday guests
- Best for purchasing gifts
- Best for holiday travel
- Best for financing large purchases
- Best for transferring a balance
- The bottom line
Best for hosting holiday guests
Whether you’re planning to organize Thanksgiving dinner or host family and friends over Christmas, a card that offers that offers a generous amount of cash back on groceries, like the Blue Cash Preferred® Card from American Express, would help put some cash back in your wallet.
Blue Cash Preferred® Card from American Express
The Blue Cash Preferred® Card from American Express offers NEW 6% Cash Back on select U.S. streaming subscriptions & 3% Cash Back on transit including taxis/rideshare, parking, tolls, trains, buses and more. Earn 6% Cash Back at U.S. supermarkets on up to $6,000 per year in purchases (then 1%). 3% Cash Back at U.S. gas stations. 1% Cash Back on other purchases.
What to look out for. You can only earn the higher cashback rate on the first $6,000 spent at U.S. supermarkets each calendar year. However, because the spend cap resets in January, you shouldn’t have to worry about surpassing that amount on holiday food this year.
If you do max out the spend cap, you’ll earn $360 cash back at U.S. supermarkets per year.
Best for purchasing gifts
There are several credit cards that offer rewards on department store and online purchases. These allow you to earn cash back and points on a variety of gift purchases, including clothing, perfume, electronics, tools and more.
Chase Freedom®
Earn 5% cash back on up to $1,500 in combined purchases in bonus categories each quarter you activate. Enjoy new 5% categories every 3 months. Unlimited 1% cash back on all other purchases.
From Oct. 1 through Dec. 31, 2019, Chase Freedom® cardholders earned the higher cashback rate at department stores and on purchases made using PayPal or Chase Pay. The department store category included Bloomingdale’s, Dillard’s, Kohl’s, Macy’s, Neiman Marcus, AliExpress and much more. Since Chase Freedom® does not release its full cashback calendar in January, but rather throughout the year, it remains to be seen if the same third quarter categories will return in 2020. Check out our calendar of Chase Freedom® category announcements for 2020 as they are announced.
What to look out for. Because the Chase Freedom® card changes bonus categories each quarter, you will not have the opportunity to earn the higher cashback rate at department stores after the fourth quarter of 2019. Additionally, the following merchants are not included in the department store category: Walmart, Target, Kmart, TJ Maxx (and other discount stores), electronics stores, general merchandise and variety stores, as well as gift cards purchased at locations other than the department stores found here.
Discover it® Cash Back
The Discover it® Cash Back card offers 5% cash back at different places each quarter like gas stations, grocery stores, restaurants, Amazon.com and more up to the quarterly maximum, each time you activate, 1% unlimited cash back on all other purchases - automatically.
If you plan to purchase gifts or holiday decor from Amazon.com, Target.com and Walmart.com, you can come out on top with the Discover it® Cash Back card during the fourth quarter of 2020. Cardholders can earn the cashback rate on up to $1,500 in purchases at those locations from Oct. 1 through Dec. 2020, upon activation.
What to look out for. Like the Chase Freedom® card, the Discover it® Cash Back limits the 5% cashback rate to the first $1,500 per quarter. However, if you max out the spending cap each quarter, you have the potential to earn $300 cash back per year. Additionally, keep in mind that the earning categories change each quarter.
Bank of America® Cash Rewards credit card - $200 Cash Rewards Offer
If you make the majority of your gift purchases online, you can come out on top with the Bank of America® Cash Rewards credit card - $200 Cash Rewards Offer. The card currently offers 3% and 2% cash back on the first $2,500 in combined choice category/grocery store/wholesale club purchases each quarter, 1% on all other purchases.
The “choice” category includes online shopping and mobile app purchases from a variety of merchants, such as Amazon.com, Etsy.com, Apple.com, Groupon.com, Walmart.com, Ticketmaster.com, Target.com, Nike.com, Dickssportinggoods.com and more.
What to look out for. You can only earn the higher cashback rates on your choice category, grocery store and wholesale club purchases on the first $2,500 in combined purchases each quarter. That said, if you max out the spending cap by making $2,500 in choice category purchases each quarter, you can earn $300 cash back on those purchases in one year.
Best for holiday travel
If you’re traveling home for the holidays or planning a vacation, you should consider a card that offers a generous rewards rate on gas or travel purchases.
Road trip: Costco Anywhere Visa® Card by Citi
If you’re planning an upcoming road trip, the Costco Anywhere Visa® Card by Citi offers one of the highest cashback rates on gas currently available. Cardholders earn 4% cash back on eligible gas for the first $7,000 per year and then 1% thereafter, 3% on restaurants & travel, 2% at Costco & Costco.com, 1% on all other purchases.
If you max out the 4% cashback rate by spending $7,000 in a year on gas purchases, you’ll earn $280 cash back on those purchases in a year.
What to look out for. If you purchase gas from superstores, supermarkets, convenience stores or warehouse clubs other than Costco – or, if you purchase fuel for non-automobile purposes — you will not earn the cashback rate.
That said, you can earn the 3% cashback rate on a broad range of travel purchases, including airfare, hotels, car rentals, travel agencies, cruise lines and Costco Travel purchases.
Air travel: Chase Sapphire Preferred® Card
The Chase Sapphire Preferred® Card offers a valuable sign-up bonus that can be used toward travel to visit family or take a vacation over the holidays. Cardholders earn 60,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. When you redeem those rewards for travel through Chase Ultimate Rewards, they’ll be worth $750. Plus, the card offers 2X points on travel and dining at restaurants & 1 point per dollar spent on all other purchases worldwide.
Additionally, Chase Sapphire Preferred® Card members can transfer points at a rate of 1:1 to 10 airline travel partners and three hotel travel partners.
What to look out for. The Chase Sapphire Preferred® Card charges an annual fee of $95. However, the value of the sign-up bonus more than makes up for that cost during the first year of card membership.
Best for financing large purchases
We recommend paying your credit card balance in full each month. However, if you find yourself making a large purchase(s) that you want to pay it off over time, you should choose a card that offers a 0% introductory APR for an extended period of time, like the BankAmericard® credit card or the Citi Rewards+℠ Card.
BankAmericard® credit card
With the BankAmericard® credit card, you won’t be charged interest on purchases for well over a year. The card offers a 0% Introductory APR on purchases for 18 billing cycles, then a 14.49% - 24.49% Variable APR.
What to look out for. The BankAmericard® credit card does not offer a rewards program or sign-up bonus. So, while you can enjoy not paying interest charges on purchases for an extremely long period of time, you will not earn points or cash back on those purchases.
Citi Rewards+℠ Card
The Citi Rewards+℠ Card offers an introductory APR on purchases of 0% for 15 months (then an APR of 14.99% - 24.99% (variable)). However, unlike the BankAmericard® credit card, the Citi Rewards+℠ Card comes with a rewards program.
Cardholders earn 2X ThankYou® Points at Supermarkets and Gas Stations for the first $6,000 per year and then 1X Points thereafter. Plus, earn 1X Points on All Other Purchases. Cardholders also earn 15,000 bonus points after you spend $1,000 in purchases with your card within 3 months of account opening; redeemable for $150 in gift cards at thankyou.com.
What to look out for. You can only earn the two-point rate on the first $6,000 spent at supermarkets and gas stations during the first year of card membership. That said, if you max out that spend cap, you can earn 12,000 points from those purchases during the first year of card membership.
Best for transferring a balance
If you end up charging a large amount on a high interest card over the holiday season on Black Friday sales, gifts, entertaining and travel, you may want to consider transferring the debt to a credit card that doesn’t charge interest on balance transfers.
Discover it® Balance Transfer
The Discover it® Balance Transfer card offers an introductory APR on balance transfers of 0% for 18 months, then an ongoing APR of 13.49% - 24.49% variable.
What to look out for. Although the Discover it® Balance Transfer card doesn’t charge interest on balance transfers for more than a year, the card does charge balance transfer fees. Cardholders pay a 3% intro balance transfer fee, up to 5% fee on future balance transfers (see terms)*.
The bottom line
Whether you plan to throw a holiday feast, visit relatives out of town or purchase gifts for the entire family, you can benefit from having the right card this holiday season. For example, if you’re planning to drive a long distance to visit friends or family, you’ll want to choose a card that offers a generous rewards rate on gas purchases, like the Costco Anywhere Visa® Card by Citi. But if you plan to do the bulk of your gift shopping at department stores, a card that offers cash back on those purchases, like the Chase Freedom® card, could be ideal.
Or, if you’d rather earn additional rewards on every purchase – from gas and groceries to travel and dining – you should consider a flat-rate credit card, such as the Chase Freedom Unlimited® card.
With the Chase Freedom Unlimited® card, you won’t have the hassle of dealing with rotating bonus categories or spending caps. The $0-annual-fee card lets you earn a $150 Bonus after you spend $500 on purchases in your first 3 months from account opening. Earn unlimited 1.5% cash back on all purchases.
