Best Credit Cards for (New) Parents
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Any parent will tell you that there’s nothing that can prepare you for how much having a baby will change your life. And while there’s little that can be done to prepare you for how much a baby will change you finances, as a new mom (my son is now nine months old), I have one unexpected tip — apply for a new credit card.
When you become a parent, where you spend your money changes drastically overnight. One night you’re heading to happy hour after work, the next you’re changing diapers and feeding a baby. You may have traveled every month pre-kid. Post-kid travel is far more difficult.
Kids are amazing, but they change your lifestyle and spending habits. So, your credit card rewards program should probably change too. The good news is that several credit cards offer great rewards and protection for new moms and dads.
Three Spending Changes, and the Cards to Fit
Here are three major ways your spending changes with kids, and which credit cards correlate to that new way of spending.
Pre-kids: You go out to movies, restaurants, and bars.
Post-kids: You buy more groceries and stay home.
Any credit cards you have that pay high rewards for entertainment or dining out should be stashed in your freezer post-kids. You’ll be doing a lot less of this than you did before children. (But that’s ok, because your child entertains you with his constant discoveries and endless antics.)
Instead of dining out or heading to the bar or movies, you’ll be spending more time cooking at home. If you don’t already have a rewards card that pays you top dollar for groceries, get one now. My picks for cash back on groceries?
1. The Amex EveryDaySM Credit Card from American Express
If you want a card that offers extra points at US supermarkets, without an annual fee, the Amex EveryDaySM Credit Card from American Express is a great choice. You get 2x points at US supermarkets on up to $6,000 per year in purchases (then 1x), plus 1 point for other purchases. And because you’ll be making a lot of trips to the grocery store for items forgotten due to sleep deprivation, when you use your card 20 or more times per billing cycle, you get 20% more points on those purchases less returns and credits.
With the EveryDay card, you earn American Express membership points which can be used for rewards from over 500 leading brands in travel, gift cards, merchandise, or entertainment. My vote is to rack up the points and use them to plan a vacation when your little one is eighteen months or so old.
When it comes to warranties and making returns, the EveryDay card offers extended warranty protection on products you buy with your card, return protection for 90 days in case the merchant won’t take it back, and purchase protection against theft and accidental damages for 90 days from purchase. So when your newborn spits up on your brand new going back to work outfit, the EveryDay card will have you covered.
- Earn 10,000 points after you use your new Card to make $1,000 in purchases within the first 3 months.
- No annual fee. Plus, 0% intro APR on purchases and balance transfers for 15 months, then a variable rate, currently 12.99% to 21.99%, based on your creditworthiness and other factors.
- Earn 20% more points: Make 20 or more purchases with your Card in a billing period and earn 20% more points on those purchases less returns and credits. Terms and limitations apply.
- 2x points at US supermarkets, on up to $6,000 per year in purchases (then 1x); 1x points on other purchases. Terms and limitations apply.
- The Amex EveryDay Card comes with the security and 24/7 service of American Express.
- Terms and limitations apply.
2. Blue Cash Preferred® Card from American Express
The Blue Cash Preferred® Card from American Express pays you 6% cash back back at U.S. supermarkets on up to $6,000 per year in purchases (then 1%), 3% back at US gas stations and select US department stores, and 1% on other purchases. You get cash back in the form of Reward Dollars that can be redeemed as a statement credit. (Terms and restrictions apply.) While there is a $75 annual fee, if you spend just over $100 a month on gas and groceries this card pays for itself. And I don’t know a parent who manages to spend less than $100 a month on groceries. Even before your baby starts eating solid food, you’ll find that it’s too much effort to go to restaurants and dine-in instead.
- Get $150 back after you spend $1,000 on purchases on your new Card in your first 3 months. You will receive $150 back in the form of a statement credit.
- Hassle-free cash back: no enrollment required, the same great reward categories year-round.
- Earn Cash Back: 6% US supermarkets up to $6,000 per year in purchases, 3% US gas stations & select US dept stores, 1% on other purchases. Terms and limitations apply.
- Cash back is received in the form of Reward Dollars that can be redeemed as a statement credit.
- A credit card that gives you cash back with a 0% Intro APR Offer on purchases and balance transfers for 15 months.
- After that, your APR will be a variable rate, currently 12.99%-21.99% based on your creditworthiness and other factors.
- Terms and restrictions apply.
Pre-kids: You go to many stores.
Post-kids: You start shopping mostly at one or two stores.
If pre-kids you went to one store for eggs and milk, and a different store for toilet paper and paper towels; post-kids you’ll now shop at just one store for everything. Research shows this, and companies are vying to be the one-store-fits-all for new parents. It’s a hassle to take kids of any age in and out of their car seat and into multiple stores. Plus, you just don’t have time to shop around like you used to.
So how does this impact your rewards? You should get a rewards card for the place you shop the most. For many parents, including myself, this is Target and Amazon.
3. Target REDcard
The Target Red Card pays you 5% back on all Target purchases. And there’s no yearly fee. So, when Target becomes your go-to store for pretty much everything from diaper rash ointment to baby food to laundry detergent to bananas, this card will save you quite a bit by giving you 5% back in rewards.
4. Amazon Rewards Visa
For the days when you just can’t get out of the house to make it to Target, or the Babies R Us is too far of a drive, you’ll find yourself ordering a lot from Amazon.
In the first few months after our son was born we probably ordered items from Amazon 3+ times a week. These were items we didn’t know we needed until suddenly we did. (Like the crib rail cover for when our son starting chewing on his crib and paint chips were going all over the floor and into his mouth.)
Many parents also order diapers and baby food from Amazon because the bulk prices are excellent.
Amazon happens to have their own card that pays 3% back on all Amazon.com purchases; 2% back at gas stations, restaurants, and pharmacies; and 1% back for all other purchases. Additionally, you’ll get a $50 Amazon gift card when approved for the card. With no annual fee, if you’re spending several hundred dollars a month at Amazon, this card is worth adding to your wallet.
Pre-kids: Shopping protection is great.
Post-kids: Extra shopping protection is essential.
When you become a parent, time flies faster than it ever did before. So that dress you bought that required a return within 30 days? You’ll find it at the bottom of your closet, still not fitting, eight weeks later. Even if you had worn it, your child might have stained it with his blueberry covered hands. Thankfully, there are credit cards that have you covered.
5. The Platinum Card® from American Express
The Platinum Card® from American Express offers return protection for those times when you change your mind about a purchase you made with your card.
If you want to return a purchase and a store won’t take it back, American Express will take it back for you as long as it's covered under this program (not all purchases are). They will refund an eligible purchase (up to $300, and up to a maximum of $1,000 per calendar year per card account) within 90 days if you’ve changed your mind.
- Earn 40,000 points after you spend $3,000 on purchases on your new Card in your first 3 months.
- With the Platinum Card, you can receive up to $200 a year in statement credits for airline incidental fees like checked bags fees, flight-change fees, and snacks.
- To receive the statement credit, you need to enroll and select a qualifying airline.
- There are no foreign transaction fees with purchases made on your Platinum Card.
- Platinum Card Concierge is your personal resource to help secure a last minute restaurant reservation, or shop for a hard-to-find gift.
- Terms & restrictions apply.
6. Discover it® Card
Discover it card offers 0% APR on purchases and balance transfers for 14 months — then a variable purchase APR applies (currently 10.99% - 22.99%). A 3% fee applies to each transferred balance. You get 5% cash back on rotating categories throughout the year. From July through September 2014, get the bonus cash back at gas stations on up to $1,500 in purchases when you sign up. Get a free FICO® Credit Score online and on your monthly statement to help you stay on top of your credit. Plus, this card looks out for you, since each Discover purchase is monitored. If it's unusual, you're alerted by e-mail, phone or text — and never responsible for unauthorized Discover card purchases.
Other great perks of the card are a free FICO score on your statement, 24/7 U.S. based customer service, and no annual fee.
Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and have not been reviewed, approved or otherwise endorsed by any card issuer.