NerdWallet’s Best Credit Card Tips for August 2024
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August is a month of contradictions. Temperatures may still hover near the triple digits, but stores are in full Halloween-decorations mode. The days still feel lazy and carefree, but kids are beginning to head back into the classroom. National S’mores Day is Aug. 10, but so is National Shapewear Day.
Still, it’s possible to enjoy these waning summer days while preparing for the busy fall season ahead. Before you swap out the citronella candles for the fire pit, read on for our best August credit card tips.
» SEE: Best credit cards right now
Back-to-school shopping
The National Retail Federation estimates that American households with school-age students will spend an average of nearly $875 per household on back-to-school shopping in 2024. From school supplies to electronics, clothes and shoes, all that shopping adds up to a hefty bill.
Discover currently features grocery stores and Walmart as bonus categories for July to September 2024. Make sure you activate the bonus and then pay for back-to-school shopping purchases with your Discover it® Cash Back or Discover it® Student Cash Back.
Though the expense of back-to-school shopping can be a tough pill to swallow, we have a few credit card tips to help you minimize those expenses.
Take advantage of tax-free holidays
If you live in a state with a tax-free back-to-school shopping weekend, that can be a great time to find savings on clothes, shoes, backpacks, school supplies, and electronics. Many retailers schedule sales in coordination with these tax-free holidays, so shop around for the best deal.
Here’s a quick look at which states are holding 2024 tax-free periods in August:
Arkansas: Aug. 3-4.
Connecticut: Aug. 18-24.
Florida: July 29-Aug. 11.
Iowa: Aug. 2-3.
Maryland: Aug. 11-17.
Massachusetts: Aug. 10-11.
Missouri: Aug. 2-4.
New Mexico: Aug. 2-4.
Ohio: July 30-Aug. 8.
Oklahoma: Aug. 2-4.
South Carolina: Aug. 2-4.
Texas: Aug. 9-11.
Virginia: Aug. 2-4.
West Virginia: Aug. 2-5.
Note that each state has its own rules on tax-free holidays, including dollar amount caps on tax-free goods. Some of the states above allow tax-free purchases on electronics, for example, while others are limited to clothing and shoes. A quick online search should lead you to your state’s specific tax-free holiday terms.
Shop around for merchant-specific offers
Most major credit card issuers offer some type of rebate or incentive when you use their credit card to shop with specific merchants. You’ll usually find those offers by logging in to the account or checking your email inbox. American Express, for instance, has AmEx Offers, which issue bonus rewards or a statement credit when you make qualifying purchases with specific retailers. Sometimes seasonal offers are available that offer discounts during tax time, holidays, back-to-school or other occasions.
When you combine offers with rewards, you’ll start to rack up savings. If you have an AmEx card like the $0-annual-fee Blue Cash Everyday® Card from American Express, you can get value back on multiple back-to-school expenses from gas to groceries. It earns 3% back at U.S. supermarkets on up to $6,000 spent per year; 3% back at gas stations on up to $6,000 spent per year; 3% back on U.S. online retail purchases on up to $6,000 spent per year; and 1% back on all other purchases. Terms apply.
Depending on the offer, you could potentially snag 3% and even more on a U.S. online retail purchase with an eligible merchant.
Stack savings with an online shopping platform
To ratchet up rewards even further, look to an online shopping platform like Rakuten or iBotta. Some offer cash back on your purchase while other portals can help you earn airline miles or hotel points.
Though finding the right combination of merchant offers and cash-back platforms can add time to your back-to-school shopping process, the savings are often worthwhile.
Say you’re making a $75 school supplies purchase. You’ve activated a 15% off merchant offer on your card, and you shop through an online portal that’s offering 7% cash back. Here’s what your rewards could look like on that purchase, assuming you meet the terms:
$11.25 from the merchant offer added to your card.
$5.25 from the 7% cash back portal.
$2.25 from your 3% cash-back credit card.
That’s a total of $18.75 back in rewards from that one $75 purchase, not including potential savings from tax-free holidays or back-to-school sales. This same strategy applied several times to different eligible purchases can go a long way.
Consider a credit assist for your college-age kid
If you’re the parent of a (soon-to-be) college student who's under 21, consider adding your child as an authorized user on one of your credit cards, or co-signing for them to get their own credit card. A lengthy credit history is a key component of a good credit score, and if you yourself have good credit, it can benefit your child.
However, this strategy carries certain risks, so you'll also want to educate your child on best practices for maintaining a credit card, including the importance of paying bills in full and on time to avoid incurring interest or damaging your credit scores.
Prepare for the holidays with a debt payoff strategy
The lull between a busy summer travel season and the start of the holidays can offer a welcome break for your cash flow. That makes the next few months a prime time to pay down debt and get your finances in a more positive place so you can enjoy the holiday season with less financial stress.
If interest rates on your current credit cards are interfering with your payoff plan, consider applying for a balance transfer credit card. The $0-annual-fee Wells Fargo Active Cash® Card, for example, offers 0% intro APR on Purchases for 12 months and 0% intro APR on Balance Transfers 12 months from account opening on qualifying balance transfers, and then the ongoing APR of 20.24%, 25.24%, or 29.99% Variable APR.
Note that balance transfer requests must be made within 120 days from account opening to qualify for the introductory APR, and a balance transfer fee applies. That fee is either $5 or 3% of each balance transfer, whichever is greater, for 120 days from account opening. After that, the fee goes up to 5% for each balance transfer, with a minimum of $5.
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