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Study: Best Credit Cards for Online Shopping, 2013
Black Friday and beyond: Get cash back for your holiday shopping
Read more about Survey: Holiday Shopping 2013 - Cyber Monday Growth
With the holidays just around the corner, many consumers will soon start shopping online for gifts. But they’ll be leaving money behind if they don’t use the right credit card.
To attract new customers, many credit cards offer special deals specifically for online shopping - and you could easily earn cash back and rewards just for buying things you’d be buying anyway.
Why not give to yourself while you’re giving to others? All you need to do is make sure you’re armed with the right credit cards before you start filling up your online shopping cart.
We’ve done the hard work by zeroing in on the new offers that will give you the best payback. Of course, this money-saving idea assumes you’ll pay off your balance when it comes due, otherwise the late fees and interest charges negate the sweet perks.
Here were the guidelines we used in our study: Taking into account nationwide averages, we measured the perks of various cards based on an average American consumer (for the purposes of this article, we’ll call him Jake). Jake spends $700 shopping online from Thanksgiving through December, of which 10% is through Amazon.com and the rest is through various online retailers (that’s fairly typical behavior for an American consumer).
Below are the credit cards that came out best for an online holiday shopper like Jake:
Best Overall: Chase Freedom
Chase Freedom comes in with Jake pocketing $209.80 by the time he's done. Assuming Jake was new to using the Chase Freedom card and he used only that card for all of his online shopping, he would earn:
Runner-Up: Citi Dividend Platinum Select Visa
Citi Dividend Platinum Select Visa comes in with Jake earning $107. If Jake solely used his new Citi Dividend card for his $700 online shopping spree, he would receive:
To be sure, Jake could earn more if some of his shopping with the Citi Dividend Card went toward Best Buy, department stores and toy stores, which are the categories for which Citi provides users with 5% cash back, instead of the usual 1%, on purchases between October and December 2013.
For all the cards mentioned with 5% cash back categories, consumers must manually enroll in the 5% bonus spending categories, which change each quarter, but the process is quick and easy. All of the cards limit the amount of spending that can fall into the 5% bucket (earn up to $75 per quarter for Discover It and Chase Freedom and earn up to $300 per calendar year for Citi Dividend Platinum Select.)
For shoppers with an existing balance, take a look at the Discover It. If he used this card, Jake would earn $35 as cash back (because he’d receive 5% cash back on that $700 spent on online shopping between October and December 2013 ).
Jake could make those earnings even higher if he shopped on ShopDiscover, Discover's online shopping portal. When Discover account holders go through ShopDiscover to make their online purchases from certain retailers, they earn 5% to 20% back. For example, beginning Nov. 7, 2013, through Jan. 8, 2014, card members shopping through ShopDiscover can earn a 10% cashback bonus at Sears, Nordstrom, and Macys. Plus, the Discover It offers price protection, extended warranty and return protection on eligible items.
This card is particularly helpful for people looking for a balance transfer deal. Discover It offers 0% intro APR on balance transfers for 18 months, after which the variable purchase APR comes into effect (currently 10.99% - 22.99%). You’ll pay a 3% fee for each balance transferred.
For travelers who plan to spend over $1,000 this holiday season, take a look at the Barclaycard Arrival World MasterCard. It offers 40,000 bonus miles if you spend at least $1,000 on purchases within the first 90 days of opening your account – that's worth $400 off your next trip. Moreover, you earn 2x miles on all purchases. There is an $89 annual fee, which is waived for the first year.
For big spenders who plan to spend thousands of dollars this holiday season, consider the Chase Sapphire Preferred. The card will give you 40,000 bonus points after you spend $3,000 on purchases within the first three months of opening your account. That alone is worth $500 toward travel rewards when you redeem through Chase Ultimate Rewards. There is a $95 annual fee, but that is waived the first year.
Disclaimer: This content is not provided or commissioned by the company whose products are featured on this site. Any opinions, analyses, reviews or evaluations provided here are those of the author's alone, and have not been reviewed, approved or otherwise endorsed by the Advertiser. This site may be compensated through the Advertiser's affiliate programs.
Disclaimer: Discover is a paid advertiser of CreditDonkey.
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