I think people forget about the hidden costs of the holidays. I'm guilty of buying a new top when maybe I could just wear a festive colored one that I already have. Thanks for the reminder. I'm hoping to score some cash back this year.
How to Get 5% Cash Back on Holiday Purchases
How much did you spend during the holiday season last year? How much will you spend this year? Think for a moment.
Perhaps you’ll spend $500-$1000 on gifts?
And what about food and clothes?
Whether you’re kicking off the season by hosting Thanksgiving or just bringing appetizers to holiday dinner parties, you may spend an extra $300 on food.
A new outfit for New Years Eve along with tickets to a show or two during the holiday season will run about $200.
And travel? If you have to travel anywhere, you’re looking at $50 for a tank of gas (at least) and upwards of $2,000 if you’re buying plane tickets for your whole family.
The reality is that the holidays cost a lot of money.
Thankfully there are 5% cash back credit cards that will ease the strain on your wallet this season. (Or at least give you a boost in your cash reserves in January when you’re able to redeem the rewards.) If you spend $3,500 during the holidays on a 5% back card, you’d be entitled to $175 in cash back rewards. Even if you just spend $500, with a 5% rewards card you’ll get $25 back.
So before you head out to purchase gifts (and dinner party supplies, and a new outfit, and plane tickets), consider picking up one of these top 5% cash back rewards cards for the holiday season.
Target REDcard
When I think of Christmas shopping, I immediately think of Target. This is because as a kid I would save up my money and my parents would let me visit Target by myself and buy presents for everyone. (For several years my present of choice was a one dollar box of mint holiday cookies.) Target has gifts for everyone on your list — from clothes to electronics; plus with groceries in many stores you’ll also save 5% on food for the holidays.
Card Highlights
- 5% off (Note that this is an immediate discount, not a typical cash back.)
- Free shipping on Target.com
- Extended returns (You get an additional 30 days to return an item.)
Chase Freedom
The Chase Freedom rewards card has rotating categories that change with the season. From October to December the 5% cash back categories are:
- Hotels
- Airlines
- BestBuy
- Kohl's
So if you’re planning to book some holiday travel (or using your holiday bonus to book a trip for later in the winter) Chase Freedom is a best bet.
Note that the 5% back is limited to $1,500 in spending (so $75 cash back) each quarter and you must enroll your card for the rotating rewards each quarter. (Enroll via a reminder email or online.)
Card Highlights
- 5% cash back from airlines, hotels, BestBuy, and Kohl's through December
- 1% cash back on all other purchases
Citi Dividend Platinum Select Visa
The Citi Dividend rotates 5% back categories like the Chase Freedom does. From October through December, this card will give you 5% cash back at Macy’s, electronics stores, and toy stores. So if you’re like me and will be doing toy shopping this season, the Citi card is a great option. And, if you don’t have kids, you’ll probably be looking for that perfect New Year’s Eve outfit — which Macy’s will have.
Note that Citi limits the amount of cash back to $300 per calendar year (so you could accumulate all of the rewards in the final quarter), and you must enroll in the rotating rewards program.
Card Highlights
- 5% cash back at Macy’s, electronics stores, and toy stores
- 1% cash back on all other purchases
Discover More Card
Would you rather avoid the holiday lines on Black Friday, Christmas Eve, and every other day in between by shopping online? If you prefer shopping online, then use (or apply for) a Discover card for your holiday season shopping, as Discover’s rotating rewards include 5% cash back at all online stores. When you actually need to go into a physical store, you also get 5% back at department stores this holiday season. Like the Chase card, the 5% back is limited to $1,500 in purchases.
Card Highlights
- 5% cash back from online retailers and department stores through December
- 1% cash back on all other purchases
Blue Cash Preferred From American Express
If you’re hosting Thanksgiving, a New Year’s Dinner, or a party anytime in between, you’ll likely be paying a pretty penny for food with the increased costs in food prices. Thankfully, the Blue Cash Preferred card from American Express offers 6% back (yes, that's 6%, not 5%), on shopping in grocery stores. For those traveling by car during the holidays, this card also offers 3% back at gas stations. Department store shopping also gets you 3% back.
The real benefit with this card is that these rewards aren’t just available during the holiday season; they’re available all year long. However, there is a $75 annual fee (which pays for itself in cash back if you spend just $104 a month on groceries.)
Card Highlights
- 6% cash back at grocery stores
- 3% cash back at gas stations
- 3% cash back at department stores
- 1% cash back on all other purchases
No matter what your plans are for the holidays this year, there’s a card that can help you earn 5% back.
