Best Credit Cards for Back-to-School Shopping of June 2021

The coronavirus pandemic is hurting household finances just as remote learning is demanding more of them. As big-ticket electronics and furnishings replace shoes and lunchboxes on back-to-school shopping lists, many parents surveyed by U.S. News in August said they have opted not to use credit cards to pay for these items.

On the one hand, these parents of grade school and college students are trying to avoid debt. On the other hand, there are opportunity costs: You give up rewards, 0% annual percentage rate offers and chances to teach kids about credit.

Here are the survey highlights:

Just 31% of parents said their children are attending school fully in person.

About 61% of parents said they haven’t used a credit card for back-to-school purchases this year, but almost 5% said they used a card because they couldn’t afford the expenses otherwise.

COVID-19 economic pressures have made paying for back-to-school items difficult for 17% of respondents.

Nearly half of parents are spending less on traditional back-to-school expenses compared with other years.

Most parents who used a credit card for back-to-school expenses said they chose a rewards card.

About 26% of families purchased technology for this school year.

Only about 14% of respondents said their children have their own credit cards or are authorized users on parents’ cards.

Many parents indicated that personal finance education has room to improve, as 83% said high schools don’t do enough to teach kids about money.

When it comes to educating their kids about money concepts, more parents teach them about saving and budgeting than about investing and using credit.

Shopping for back-to-school season with a credit card has its perks. You can take advantage of rewards, introductory APRs, sign-up bonuses and protections, which can add up to major savings.

Cards with these features could be helpful for back-to-school shopping:

Rewards. If you’re spending money on school supplies no matter what, you might as well get something in return. With rewards credit cards, you can earn points, miles or cash back when you use the card to make purchases.

You could redeem your cash back as a statement credit to offset your purchases, or save your rewards and use them for gift cards, travel discounts and other options.

Sign-up bonuses. A credit card with a sign-up bonus can also help defray back-to-school costs, particularly if you’re getting a cash back bonus. Cards with sign-up bonuses allow new cardholders to earn extra points, miles or cash back rewards by meeting spending minimums, usually over the first few months.

The real value of credit card rewards is often in the sign-up bonus: Rewards for everyday purchases may pale in comparison.

“Anytime you have a large expense, or a series of smaller expenses that turn into a large expense in total, consider opening up a new card to take advantage of the sign-up bonuses that banks offer,” says Dan Miller, father of six and founder of Points With a Crew, a blog that helps families – especially large families – travel inexpensively.

0% Introductory APRs. This type of card gives you time to pay off big-ticket back-to-school items, such as computers and desks, without interest – as long as you pay off your balance before the 0% rate expires.

If you don’t, you could end up with a bigger bill than you expected. A card that normally charges a 15% APR means you will pay a 15% premium on your remaining balance.

“If you’re thinking about what the APR is, you’re thinking about credit cards the wrong way,” says Grant Sabatier, creator of the personal finance website Millennial Money. “The APR is the percentage over the price of anything you’re going to buy.”

Price protection. Credit cards with price protection can help if you’re worried about back-to-school inflation: nabbing what you thought was the best price on an item, only to find it on sale a week later. If you used a credit card with price protection, you could receive a refund for the difference if you find the same item for a lower price within a certain time frame, usually 60 to 90 days.

Purchase protection. If your child loses or damages a costly laptop, tablet or smartphone, purchase protection can reimburse you for the cost of the item within a certain coverage period.

Extended warranty. Another good feature for big-ticket items, extended warranty coverage lengthens your original manufacturer’s warranty. If you use a credit card that offers this coverage for free, you can save money by declining to purchase the retailer’s extended warranty.

Generally, a flat-rate cash back credit card will be the most flexible card for back-to-school shopping. Flat-rate cash back cards earn the same rate of cash back on every card purchase you make.

This type of card could allow you to earn not only a sign-up bonus but also rewards with many retailers. A cash back card can give you a nice kickback if your expenses are spread across big-box retailers, online merchants and grocery stores.

Using a single cash back card with a good earning rate also keeps back-to-school rewards simple. You won’t have to keep track of spending categories.

But a different card might be a better choice, depending on your plans for shopping or redeeming rewards.

You might want to choose a travel credit card to stash away rewards from back-to-school shopping for an upcoming trip.

“Rewards come in all flavors,” Sabatier says. “Oftentimes, you can get more redemption value for travel than cash back.”

But travel credit cards sometimes earn the most rewards on travel purchases, which means you might not get much for back-to-school expenses.

Store credit cards are another option, but they generally don’t offer the best value compared with cash back cards or other choices. Comparing a store card with a cash back card could be worthwhile to see which one is right for the purchases you’re planning. A store card, for example, might offer a one-time savings pass that could rival a cash back card’s sign-up bonus.

Store cards are almost always a terrible idea, although outliers exist. Stop and look at the fine print, especially APRs and fees, before you snap up offers at store checkout counters.

However, don’t overlook grocery credit cards, which could provide up to 6% cash back on purchases such as backpacks, school supplies, lunchboxes and food for school lunches.

Some of these cards offer bonus rewards categories that include many items on back-to-school shopping lists – even lunch staples. For example, Amazon Prime members with the Amazon Rewards Visa Signature Card can earn 5% cash back on school supplies at Amazon and 5% back at Whole Foods Market.

Once you’ve picked the right card for back-to-school shopping, these tips can help you manage your expenses and save money:

Stick to a budget. Even if you have a seemingly endless credit limit, that doesn’t mean you should use all of it. Make a budget for back-to-school expenses and don’t stray from it.

Try not to be tempted to exceed your budget just because you know the purchase will be approved.

Set price alerts. Staying on top of prices for major expenses such as electronics can deliver savings.

Do your best to time purchases to late summer or early fall for back-to-school deals on technology. College students may qualify for discounts year-round.

If your credit card has price protection, you can get price matching for an item if the price drops after you buy it.

Use your rewards. If you have credit card rewards, consider cashing them in for back-to-school expenses. Some issuers allow you to redeem rewards for discounted gift cards, which provide a good value and help you save on back-to-school shopping.

If you’re hoping to use a credit to stretch your budget and spend more than you can afford, it is not a good choice for back-to-school shopping. Credit cards aren’t the only way to pay for these expenses: cash, debit cards, and free or discounted school supply programs are other choices.

At the same time, credit cards with rewards and consumer protections could offer an edge over some of these methods. If you can use a card responsibly, it could pay off.

“If you have the financial discipline and means to pay off your credit card in full all of the time, then I think it makes sense to put everything on a credit card – back-to-school expenses included,” Miller says.