By Melissa Lambarena | NerdWallet
As back-to-school season approaches, your kids may have outgrown their clothes — but they don’t have to outgrow your budget.
Families with children in elementary through high school plan to spend an average of $874.68 on clothing, shoes, school supplies and electronics, according to data from the National Retail Federation. For college students and their families, the expected amount on items for the coming year is an average of $1,364.75.
Here’s how credit cards can cut some of those costs.
1. Rewards
Reward rates vary by type of card, but a decent return for cash-back credit cards might range from 2% back per dollar spent to 5% back on rotating bonus categories. Those rewards can be redeemed for cash or a statement credit to offset school purchases, for example, or applied to future travel.
A credit card that earns cash back generally requires good credit (typically, FICO scores of 690 or higher). A rewards credit card is ideal only if you pay your balance off in full every month to avoid interest charges. Otherwise, the steep interest rates on these cards will cancel out the value of rewards.
You can leverage these kinds of credit cards with purchases already allocated in your budget like gas, certain utilities or groceries, said Barbara Quan, accredited financial counselor and manager of financial education at Golden 1 Credit Union, in an email.
2. Sign-up bonuses
A credit card sign-up bonus can be worth hundreds of dollars if you meet the minimum spending requirement with planned expenses. If you’re seeking a new credit card, it’s one way to potentially defray the costs of back-to-school spending or lessen the costs of other expenses.
“Many cards offer hundreds of dollars in cash back or rewards points after meeting a minimum spending requirement within the first few months,” Quan said. “By strategically timing your back-to-school shopping to coincide with this period, you can earn the bonus while purchasing necessary…
Read the full article here
