Chase Freedom vs. Discover it: Which is Better for Holiday Shopping?

Recently, someone asked me whether they should get a cash-back credit card before they do their holiday shopping. Sure, I told them, provided you have the cash to pay your bill in full and don’t plan to carry a balance. Because, as we all know, paying interest on your holiday purchases under the guise of earning rewards would be a bad, bad deal.

Of course, she also asked which card she should get. In turn, I asked her where she planned to shop.

She said she was going to do most of her shopping online, so I replied that she should get the Chase Freedom card or the Discover it card.

Chase Freedom vs. Discover it

While I don’t have the Discover it card, the Chase Freedom is the oldest credit card I have in my wallet. While this is a solid card no matter what you buy, it can be especially awesome if you’re able to take advantage of its special bonus categories.

Here’s how it works. The Chase Freedom offers 1 point per $1 spent on all purchases, plus 5x points on your first $1,500 spent in categories that rotate every quarter. For the last quarter of this year, the bonus category includes Walmart, Walmart.com and select department stores. While all of the stores on the list may not work for you, some of the more popular included stores are JCPenney, Kohl’s, Macys, and Sears.

The Chase Freedom doesn’t charge an annual fee, and you also get a $150 signup bonus after you use your card for $500 in purchases within three months of account opening.

The Discover it card works similarly, and that’s why I suggested it to her. While it doesn’t come with a signup bonus, it does offer a flat 1 percent back on all purchases and 5 percent back on your first $1,500 spent in bonus categories. Through the end of the year, the bonus category just happens to be Amazon.com, which is pretty much perfect for the holidays.

The kicker is, right now Discover is promising to double the points you earn the first year. And, like the Chase Freedom card, it doesn’t charge an annual fee.

The Bottom Line

These two cards are winners for holiday shopping this year, but they’re not the only ones. The Blue Cash Preferred Card offers 6 percent back at grocery stores, for example. And the Barclaycard CashForward MasterCard offers a flat 1.5 percent back plus a $200 signup bonus.

Before you sign up for a new card for the holidays or any other reason, make sure to explore your options and find the right card for you.

 

Which card are you using for the holidays this year? Why?