Updated: August 7, 2012
Many people don't realize that simply using the right credit card can save them a lot of money - but a new study by Credit-Land.com aims to show them how choosing the right payment method can pay off big. Consumers who carry three or four credit cards in their wallets need to know which one to pull out where, in order to save the most money. Credit-Land.com back-to-school study shows which payment method will save consumers additional money, whether they shop in stores, online, or through online credit card malls.
How the study was done
We surveyed 150 top retailers from the National Retail Federation report and selected 18 that carry back-to-school items. We broke down the list according to three major categories: general merchants, such as super stores, discount stores, and department stores that carry a wide selection of items for back-to-school, apparel stores that exclusively sell clothing, shoes and backpacks, and electronics stores that sell computers, e-readers, cell phones and other electronics that are essentials for high-school and college students these days.
The study aimed to look at the best way to pay for purchases, depending on where consumers shop. The findings pinpointed three shopping options - brick-and-mortar stores, online retailers, and online malls offered by banks that issue credit cards.
Key Findings:
Payment Options for In-Store and Online Shopping:
- For in-store shopping, the best way to shop in a physical store is to use a general cash back credit card, because it gives additional savings that can be combined with store promotions. Also, statistically, general Cash Back Credit Cards, unlike store credit cards, give a high percent of cash back.
- Shopping through online credit card malls can save customers up to 10.7 percent more than other options, because banks and retailers offer deeper discounts when they partner up through card issuers' online malls.
- Shopping directly through online retailers works best if you use a store-branded credit card, because a regular cash back credit card may not classify an online purchase in the right merchant classification category for maximum cash back.
Payment Options for Shopping in Specific Categories:
- At department stores, using the U.S. Bank Cash+ Visa Signature card will net an additional five percent cash back program, and American Express Blue Cash Preferred card holders will get an additional three percent cash back.
- For electronics stores, using a U.S. Bank Cash+ Visa Signature card gets you five percent cash back at the Apple Store and Best Buy, while using a SimplyCash Business card from American Express OPEN will give five percent cash back at Staples or Office Depot (which aren't classified as electronics stores, but do sell laptops and other electronics).
- At apparel stores such as GAP, Old Navy and Banana Republic, customers who pay with a Citi® Dividend Platinum Select® Visa® Card - $100 Cash Back get five percent cash back.
The result of our study is the comprehensive table below that points consumers to the right payment option to save the most during the 2012 back-to-school season.
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maximize savings and earnings:
Capital One® Cash Rewards - $100 Cash Back Bonus
Intro APR on Purchases:
0% (until June 2014)
Annual Fee:
$0
Key Feature:
$100 Bonus after you spend $500 in the first 3 months
Discover it®
Intro APR on Purchases:
0% (14 months)
Annual Fee:
$0
Key Feature:
5% Cashback Bonus in categories that change throughout the year up to the quarterly maximum
Citi® Dividend Platinum Select® Visa® Card - $100 Cash Back
Intro APR on Purchases:
0% (12 months)26
Annual Fee:
$026
Key Feature:
$100 cash back after $500 in purchases within the first 3 months of account opening
Capital One® Cash Rewards
Intro APR on Purchases:
0% (until March 2014)
Annual Fee:
$39
Key Feature:
50% bonus on the cash back you earn every year
26 See the Citi card terms and conditions online.