5 Best Credit Cards for (New) Parents
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 Five Cards to Fit
Here are three major ways your spending changes with kids, and which credit cards correlate best to that new way of spending.
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.
1. Target Red Card
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.
2. Amazon Rewards Visa
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: 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. The best pick for cash back on groceries?
3. Blue Cash Preferred® Card from American Express
This card pays you 6% back on groceries, 3% back on gas, and 1% on everything else. 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.
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. Or your newly purchased phone might be dropped in the toilet by your two-year-old toddler. Thankfully, there are credit cards that have you covered.
4. American Express® Gold Card
First, if you’ve changed your mind about a purchase and a store won’t take it back, American Express will take it back for you. They will refund a purchase (up to $300) within 90 days if you’ve changed your mind.
Second, if something breaks or is stolen within 90 days of purchase, you can get a refund of the purchase price up to $1,000.
The American Express Gold card is a good option for a charge card. (Note — as a charge card, you’re obligated to pay the entire balance each month.)
(The AMEX Blue Cash Preferred card mentioned above is a credit card that also includes these two shopping protection benefits.)
5. Capital One® Cash Rewards - $100 Cash Back Bonus
The Capital One No Hassle Rewards card is a Visa Signature card. Visa Signature cards have many of the same perks as American Express cards. In the case of this Capital One card, you will be reimbursed for a maximum of $500 for damage or theft to a purchase within the first 90 days. Plus the card pays you 1% back on all purchases with no annual fee.