Store cards that may be worth opening for the holidays

“Would you like to open a store card today and save 10 percent?” You may be so habituated to this question that you instinctively answer “No, thanks” – and you might become even more desensitized as you do your holiday shopping.

While it’s wise to be cautious about signing up for a store card on the spot, we vetted some store cards that we feel offer fair rewards in exchange for your retail loyalty. Here are some you might consider – if you plan on doing your holiday shopping at the retailer in question.

Target REDcard

Target REDcardTarget may very well be the store where all your holiday-shopping needs intersect: gifts, decor, winter clothing, food, cooking supplies, extra bedding for out-of-town guests.

The retailer’s credit card offers an unlimited 5 percent back on pretty much all of that. Only some items, such as prescriptions, clinic services and Target gift cards are ineligible. You also get free standard shipping on (without the card, your purchase would need to be over $25).

The REDcard charges no annual fee, meaning you don’t have to worry about losing money if you don’t shop at Target often enough to cancel out the cost.

Still have a bad taste in your mouth from the holiday data breach at Target two years ago? The card is now chip enabled. And, unlike many of the chip cards in the U.S., it’s chip and PIN.

Alternatives to consider: If you’re a loyal Target shopper, there arguably isn’t a card that will give you more rewards on Target purchases. However, if your local target’s grocery department is lacking, you might consider a card that gives you elevated rewards on groceries, like the Blue Cash cards from American Express (a CreditCardForum advertising partner).

Costco TrueEarnings card

Costco TruearningsMost store cards give rewards only at the co-branded store. But the Costco card (currently issued by AmEx, but soon to be issued by Citi) is different. You get 2 percent cash back at U.S. gas stations (including those at Costco), 2 percent back at U.S. restaurants, 2 percent back on eligible travel purchases and 1 percent cash back on nearly all other purchases.

These rates hold for purchases of up to $4,000 per year, after which you get 1 percent back on everything. You’ll get your rewards annually (in February) in the form of a coupon, redeemable at Costco warehouses. If you don’t want to use it to buy merchandise, you can ask Costco for a check.

If you’re spending a lot at Costco over the holidays, all those bulk food and gift wrap purchases will give you more to redeem when you receive your coupon in February.

There’s no annual fee for the card, but you must be a Costco member (which costs a minimum of $55 a year).

Alternatives to consider: If you prefer to redeem your rewards more than once a year and don’t want to limit yourself to redemptions at Costco, you can hit a lot of the TrueEarnings categories with other cards that have more flexible redemption schemes.

As for travel and dining, the no-annual-fee Barclaycard Arrival may be a good choice, as it offers what amounts to 2 percent back (on travel redemptions) in both those categories. If you’re willing to pay a $95 annual fee, waived the first year ($40 more a year than a Costco membership), consider the Chase Sapphire Preferred, which offers 2X points per dollar on dining and travel and offers a slew of redemption options.

Macy’s Credit Card

Macys amexIf you’re buying gifts and a winter wardrobe at Macy’s, the retailer’s American Express card gives you the potential to rack up rewards to use in the new year.

The rewards (which come in the form of gift cards and special offers) are based on how much you spend each year. The more you spend, the higher your returns. So holiday spending could bump you up into the next level.

What’s especially compelling for the 2015 holiday shopping season is the card’s “Thanks for Sharing” program, which is running through Dec. 31, 2015. After enrolling for $25, you’ll get 10 percent back on most purchases. There are quite a few exclusions though, including furniture, mattresses, electronics, gift cards, athletic shoes and more.

Alternatives to consider: Rewards and gift certificates earned with this card are good only for Macy’s. So, consider some more flexible options, including cards that offer cash back on department store purchases.

The U.S. Bank Cash+ card, for example, allows you to enroll in its “department store” category for 5 percent back per quarter (on up to $2,000 in purchases each quarter).

Rotating-category cards, including the Discover it and Chase Freedom will sometimes (not always) offer “department stores” as a fourth quarter category for the holidays, meaning you can earn 5 percent back on up to $1,500 in purchases.

The American Express Blue Cash cards, meanwhile, give you bonus points on department stores year round with no limits – and you’re free of most of the restrictions the “Thanks for Sharing” promotion has.

Amazon Rewards Card

amazon rewards cardSkipping the stores and doing all your holiday prep online? The Amazon Rewards card gives you an unlimited 3 percent back on your Amazon purchases, 2 percent back at restaurants, gas stations and drug stores, and 1 percent back on everything else. You can redeem at checkout on, or for cash back, gift cards or travel.

Alternatives to consider: Rotating-category cards, including the Discover it and Chase Freedom have been known to include in their bonus categories for Q4. Both of them are for Q4 2015. If you concentrate your holiday shopping on, you may very well max out this category.

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