Online Shopping: Your Guide To The Best Credit Cards
Online shopping is fun. The 2018 TSYS U.S. Consumer Payment Study, for instance, had over 79% of cardholders talking about credit card rewards as an important deciding factor when choosing their preferred card.
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And why not?
You can get everything from your groceries to clothes online. And with the right credit card, you can earn more for free – from travel points for a free flight to your destination to your favorite iPhone
However, not all credit cards are the same – especially when it comes to shopping online. Different credit cards have different rewards – and you need to choose one that’s right for you.
The Rising Popularity of Online Shopping
Back in the 1990s and early 2000s, when Amazon was still in its infancy, not many dared to try out online shopping. That isn’t how it is today.
If you aren’t looking for Black Friday sales, it’s probably because you’ve already got what you need on Amazon Prime Day. By 2023, the U.S. is expected to have over 300 million online shoppers. We don’t need to look a couple of years ahead too. Currently, over 25% of Americans shop online at least once a month.
With online shopping becoming so popular, you might wonder – are we really getting a good deal? Now, Black Friday sales might seem sweet, and online shopping might mean you do not need to sweat it out outside too. However, getting that little bit more every time you shop online can turn big before you know it.
A 3% reward point for every dollar might not seem much. However, you probably spend around $10,000 every year on shopping. That 3% could easily mean a cool $300 that you could use.
– Choose a credit card with a higher reward rate
How many reward points are you getting for every dollar you spend? Cards that have annual fees may pay more in rewards to you.
– Know the cost of the reward points
Not every reward point is the same. Even if your credit card offers 10 points for every dollar, know what each point is equal to. Additionally, the point conversion may vary depending on the type of reward you want to redeem. Travel rewards pay better in many instances compared to, say redeeming general merchandise.
– Know the bonus categories
Many credit cards have bonus categories like fuel or groceries, where they pay more. Knowing what bonus categories are, and the reward rate will help you choose a credit card that’s right for you.
– Know the APR Rate
What if you miss out on a credit card payment? While you probably do not want that to happen – and that’s not the way you should handle your credit card – knowing the charges involved can help you make a more informed decision.
The Top Credit Cards for You To Make Online Shopping More Rewarding
Before you decide on a brand new card for yourself, check out the list of credit cards made mostly for online shoppers.
Amazon Prime Rewards Visa Signature Card:
How about a 5% discount every time you shop at Amazon.com or Whole Foods?
You also get a good 2% cashback in gas stations, drug stores, and dining purchases while giving you 1% cashback on everything else you buy. Plus, you receive an Amazon gift card too. There is no annual or membership fee – all you need is an Amazon Prime account to get started.
The rewards you earn can be redeemed on amazon.com, or you can use them for travel booking, gift cards, and even cash back with account adjustments.
Costco Anywhere Visa® Card by Citi:
If you love going to Costco to shop, this is the card you need.
How about a 2% cashback exclusively on products bought from costco.com? There is also an additional cashback of 3% on travel purchases, including online bookings made against Costco travel.
One of the practical, attractive programs includes the 4% cashback up to $7,000 on gas purchases every year, and if you have a paid Costco membership, you don’t pay any annual fee.
The only drawback of this card is that the reward you receive can only be obtained at the end of February the following year, with the account closing statement, which can be redeemed at costco.com.
Discover it® Cash Back:
Its most attractive feature is earning a cashback up to 5% or $1,500 in rotating categories. No form of annual fee or a late fee is applicable, and all rewards are matched after the first 12 months. Cashback of 1% flat is applicable for any other purchases made over time.
Target REDcard:
The Target rate card offers a discount of 5% on purchases made on target.com. There are also additional benefits like free shipping and exchange periods.
Chase Sapphire Preferred® Card:
You can earn a cool 60,000 points on spending $4,000 within three months of opening the account, all for an annual fee of $95. There are adjustable points on dining in traveling with single points and other purchases having five times the points for LYT rides up till 2022.
The bonus rewards you can earn with the Chase Sapphire preferred card on tourism and traveling are unlimited. These points can easily be redeemed through the Chase portal or the 1:1 transfer.
Capital One® Walmart Rewards™ Card:
At Walmart.com, any purchase offers 5% cashback on grocery and delivery with 2% cashback on Walmart stores’ purchases. Plus, there is no annual fee. During the first 12 months, you can use Walmart Pay and earn a cashback of 5%.
Bank of America® Cash Rewards credit card:
On spending $1,000, get a cashback bonus of $200 within 90 days after opening the account – with no annual fees.
Things To Keep In Mind While Looking For An Online Shopping Credit Card
Shopping online can be rewarding – but only if you have the right card with you. Here are a few tips to help you choose right.
– Know your reward rate – that’s the first step.
– Know if you’re going to spend the credit as it’s intended. For instance, if your credit card offers you 5% reward points on groceries, and you don’t have much to spend on them, you might look for another one.
– Your credit score can limit your credit card options.
– People with excellent credit scores and higher-income get access to better credit cards with more extensive features.
