How to Get 5% Cash Back on Holiday Purchases

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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
  • Extended returns (You get an additional 30 days to return an item.)

Blue Cash Preferred® Card 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. Thankfully, the Blue Cash Preferred® Card from American Express offers 6% back (yes, that's 6%, not 5%) at US supermarkets on up to $6,000 per year in purchases (then 1%). For those traveling by car during the holidays, this card also offers 3% back at US gas stations. Shopping at select US department stores also gets you 3% back. Cash back comes in the form of Reward Dollars, which can be used towards statement credit.

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.

Card Highlights

  • 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.

Click here to apply for the Blue Cash Preferred® Card from American Express today!

Discover it® Card

credit cardWould 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 sign up. (Editor's note: The current categories for October through December 2014 are up to $1,500 in online shopping and department store purchases.) The 5% back is limited to $1,500 in purchases. You can also get up to 20% cash back at over 200 retailers through Discover's shopping portal. 

Card Highlights

  • 5% cash back on purchases for rotating categories when you sign up
  • 1% cash back on all other purchases
  • Paying late won't raise your APR
  • No late fee on your first late payment
  • No overlimit fee
  • 0% Intro APR for 14 months on purchases and balance transfers — then a variable purchase APR applies, currently 10.99% - 22.99%. A 3% fee applies to each transferred balance.
  • Free FICO® Credit Score online and on your monthly statement

Click here to apply for the Discover it® Card

Chase Freedom

The Chase Freedom rewards card has rotating categories that change with the season.

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.)

Citi® Dividend Platinum Select® Visa® Card

The Citi Dividend rotates 5% back categories like the Chase Freedom does. From October through December, this card will give you 5% cash back on holiday shopping. 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.

(Editor's note: The current categories for July through September 2014 are eligible purchases within the Hilton Portfolio, car rental agencies, movie theaters and theme parks.)

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), excluding the $100 cash back with this offer, and you must enroll in the rotating rewards program. See Citi Dividend Card Reward Program Information.

Card Highlights

  • Earn $100 cash after you spend $500 in purchases in your first three months of cardmembership
  • 5% cash back on purchases on rotating categories throughout the year
  • Enrollment each quarter is quick and easy
  • 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.

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.

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Guest's picture

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.

Guest's picture

You have the current Chase Freedom categories completely wrong. They should be Amazon and select department stores.