CardHub.com Identifies Best Credit Cards for Back-to-School Shopping & Offers 6 Savings Tips
With the average family expected to spend roughly $635 on back-to-school shopping this year, state sales tax holidays beginning as early as next week, and 47% of people planning to do their buying in August, CardHub.com today released its annual Best Credit Cards for Back-to-School Shopping list in order to help lessen the burden on wallets across the country.
It’s definitely worth paying attention to these offers, as the right credit card can help shoppers save up to $400 via initial bonuses and/or 6% on an ongoing basis in important school-related spending categories.
Listed below, you’ll find the cards that have the potential to save you the most – whether it’s because of a lucrative initial rewards bonus, great ongoing rewards, or the extra perks that parents who are small business owners can tap into – along with 6 Tips for Back-to-School Savings and commentary from CardHub CEO and noted personal finance expert Odysseas Papadimitriou.
Best Initial Bonus
• Chase Sapphire Preferred Card: This card offers 40,000 bonus points – redeemable for a $400 statement credit – when you spend $3,000 during the first three months and does not charge an annual fee during the first year ($95 thereafter).
Odysseas Papadimitriou (OP): “Credit card companies have been offering impressive rewards bounties to new customers with above-average credit in recent years as they try to minimize losses in the event of another financial downturn. The offers that are available now are even better than last year too, as the average initial bonus has increased 15% since then. When you consider that the average back-to-school shopper can get a credit card company to pay for about 63% of their budget, it’s hard not to be intrigued by cards like the Sapphire Preferred from Chase.”
Best Ongoing Rewards
• Target REDcard: This store card will enable you to save 5% on every purchase made at the superstore and extends your window for returns by 30 days. There is no annual fee.
(OP): “Anyone who has kids knows that superstores like Target which enable one-stop shopping can be very convenient. Given that you can get literally everything you need for back to school at Target and many folks are likely planning to do their shopping there already, there’s really no reason not to get the store’s REDcard in order to decrease what you spend by a full 5%. The 30 extra days to make returns that this card provides is appealing as well because it’s no secret that kids’ tastes change seemingly every day. It’s also worth mentioning that store credit cards tend to have more lenient underwriting standards than regular credit cards offering comparable rewards.”
• Blue Cash Preferred from American Express: This card will give you 6% cash back at supermarkets, 3% at department stores and gas stations, and 1% everywhere else as well as a $150 initial bonus when you spend $1,000 within the first three months. It has a $75 annual fee.
• Chase Freedom Visa: Not only does this card offer a $100 initial rewards bonus for spending $500 during the first three months as well as 0% financing for the first 15 months, but it will also give you 5% cash back on up to $1,500 spent at Kohl’s, gas stations, and theme parks through September 30. The types of expenses eligible for 5% cash back rotate on a quarterly basis, but all purchases earn at least 1% cash back and there is no annual fee.
• Capital One Quicksilver Cash Rewards Card: This new offer from Capital One gives you 1.5% cash back across all purchases, a $100 rewards bonus for spending at least $500 within the first three months, and 0% financing through next August. It does not have an annual fee. If you do not have the excellent credit required to qualify for this card, Capital One also offers a fair-credit version, which still offers the 1.5% cash back across all purchases, but unfortunately has a $39 annual fee, a shorter 0% intro period, and no initial rewards bonus.
(OP): “While many consumers will choose to implement the Island Approach and leverage different types of credit cards in order to maximize their rewards earning capabilities in different major expense categories, others prefer the simplicity of using a single card. Offers like the Blue Cash Preferred from American Express provide the attractive combination of above-average initial rewards bonuses, high cash back earning rates at places where you can buy school supplies and update wardrobes, as well as low fees for the value.”
Best for Parents Who are Small Business Owners
The things that kids needs for the start of the school year – like pens, paper, binders, etc. – overlap significantly with the goods that make any small business function. Parents who are small business owners can therefore take advantage of above-average rewards on office supplies to set their children up for academic success.
• SimplyCash Business Card from American Express: This card rewards small business owners with 5% cash back on up to $12,000 spent annually at office supply stores and telecommunications providers, 3% cash back on up to $12,000 spent at gas stations, and 1% on everything else. It does not charge an annual fee.
• Ink Cash Business Card: This Chase business credit card offers 5% cash back on the first $25,000 that you spend on office supplies and telecommunications services each year, 2% on the first $25,000 spent at gas stations and restaurants, and 1% on everything else. You’ll also get a $200 rewards bonus for spending at least $3,000 during the first three months and don’t have to worry about paying an annual fee.
(OP): “It’s especially beneficial to be a small business owner at back-to-school time, as business credit cards are known for offering the best rewards on office supplies, which of course are school supplies by a different name. There’s really no downside to using a business credit card for personal expenses either, as business card usage activity gets relayed to your personal credit reports and you’re held personally liable for debt anyway. Just make sure to reimburse your company for whatever you buy so you don’t run into accounting issues.”
For CardHub’s full list of the Best Back-to-School Credit Cards, visit: http://www.cardhub.com/back-to-school-credit-cards/
Back-to-School Savings Tips
1. Stick to a Budget: It’s difficult to avoid overspending if you don’t have a good idea of what you can afford. That’s especially important to note these days, as only 40% of people have a budget and keep close tabs on their spending, according to a survey from the National Foundation for Credit Counseling. So, before you head to the store to make your back-to-school buys, create a list of what you need, how much you can afford to spend, and therefore what you can allocate to each item. And remember, sticking to a budget is tough, but sticking to a budget when you have a whining child next to you asking to buy seemingly everything in sight is even tougher. In other words, you may also want to consider leaving your kids at home for this trip.
2. Time Your Purchases with State Tax Holidays: A number of states waive their sales tax on certain types of expenses during August in order to make back-to-school shopping more affordable. These sales tax “holidays” begin as early as August 2, last only a few days, and can save you up to 7% on school-related purchases.
3. Comparison Shop: Every retailer will try to convince you that it has the lowest prices around, but that’s obviously not going to be the case. It therefore really pays to shop around for the best deals, at least when it comes to items that comprise a significant portion of your budget. You shouldn’t rule out shopping online over fear of shipping charges either, as more and more retailers are offering free shipping options and you may get the added benefit of shopping tax-free without being constrained to a few-day window.
4. Avoid Trends: Buying the “latest” goods – from the latest computer to the latest new clothing styles – is a great way to spend more than you need to. Saving is the name of the game at back-to-school time, so concentrate on things that were “hot” last year. It will be cheaper to start and is more likely to be on sale. All you need to do is convince your children that vintage is cool.
5. Make One Trip: Buying everything you need for back to school in a single trip will obviously make the process less stressful and time-consuming. In addition, if you are planning to take advantage of a one-time discount that many store cards offer, it will also ensure that you maximize your rewards-based savings.
6. Use the Right Credit Card: It should be clear by now just how much you can save – both on back-to-school shopping and on an ongoing basis – by simply using a well-targeted credit card or two. This is especially true now given that the best rewards card offers a $400 initial rewards bonus and the best 0% credit card won’t charge you interest for 15 months or a balance transfer fee should you decide to transfer debt from an existing card. So, whether you get a new credit card in order to save on back-to-school purchases directly or simply to replenish your coffers after the fact, it is definitely something that bears looking into.