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 your 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.
Your Spending Changes, and the Cards to Fit
Here are three major ways your spending changes with kids, and which credit cards you should use for your new ways 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?
Blue Cash Preferred® Card from American Express
The Blue Cash Preferred® Card from American Express pays 6% cash back back at U.S. supermarkets on up to $6,000 per year in purchases (1% after that), 3% back at U.S. gas stations, and 1% on other purchases. New cardmembers also get a 0% introductory APR on purchases and balance transfers for 12 months. (Then it becomes 13.74%-23.74% variable APR.) Even better, you earn $150 back after spending $1,000 in purchases in your first 3 months. And if you apply by 5/3/17, you earn 10% cash back on purchases at U.S. restaurants in the first 6 months, up to $200 back. While there is a $95 annual fee, if you spend just over $130 a month on gas and groceries you can earn about that much in rewards. And I don't know a parent who manages to spend less than $130 a month on groceries. Terms apply. See rates and fees.
Amex EveryDay® Credit Card from American Express
If you want a card that offers extra points at US supermarkets, without an annual fee, the Amex EveryDay® Credit Card from American Express is a great choice. You earn 2x points at US supermarkets on up to $6,000 per year in purchases (then 1x), and 1 point for other purchases. Plus, make 20 or more purchases with your card in a billing period and get 20% extra points on those purchases less returns and credits — a useful feature when you find yourself making quick runs for various errands (diapers, wipes, formula, binky). New applicants also get a 0% introductory APR on purchases and balance transfers for 12 months, which then becomes a 13.74%-23.74% variable APR. You also earn 10,000 Membership Reward® points after you use your new Card to make $1,000 in purchases within your first 3 months. Redeem your rewards for travel, gift cards, merchandise, or statement credits. Rack up the points and use them to plan a vacation when your little one is eighteen months or so. There is no annual fee. Terms apply. See rates and fees.
Pre-kids: You can pack a weekend getaway bag in 15 minutes and jetset at a moment's notice
Post-kids: Vacations are few and far between, due to the bigger costs and planning required
It used to be easy to drop what you were doing and take a few days off, whether it was a weekend trip to Vegas or a fun filled week in Mexico. Nowadays, each additional airfare required to get everyone on board is an extra few months of scrimping and saving. But don't worry. There are credit cards that will get you on your much deserved vacation sooner. Rack up on points and miles to get discounted tickets and rooms. There's no credit card to help you with the packing, though.
Starwood Preferred Guest® Credit Card from American Express
The reason the Starwood Preferred Guest® Credit Card from American Express is so popular among travel hackers is that this card lets you redeem travel for both airfare and hotels, unlike many co-branded airlines and hotel credit cards. That means you can pick and choose the best deal for your family. American Express Membership Rewards allows you 1:1 transfer to loyalty programs which means their points can be more valuable than those of other reward credit cards. (See all our top picks for travel reward credit cards.)
Sign up offer: Earn 25,000 bonus Starpoints® after you use your new Card to make $3,000 in purchases within the first 3 months. For a limited time, earn an extra 10,000 bonus points after spending an additional $2,000 on purchases within the first 6 months. (Offer ends 4/5.) Annual fee of $95 is waived for the first year. Terms apply. See rates and fees.
Pre-kids: You go to many stores for household items.
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.
The Target REDCard 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.
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 drugstores; and 1% back for all other purchases. Additionally, you'll get a $30 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.
I hope these credit cards will reward you well for the new spending your little bundle of joy will require.
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