Sign-up bonus, shopping portals and cash back can cut your costs
Between backpacks, fancy calculators, folders and pens, most parents of school-age children will spend hundreds of dollars by the time the school year begins.
Exactly how much? Deloitte’s 2018 back-to-school suvey projects the average family will spend $510 for school-related purchases. Clothing and acessories are expected to account for 55 percent of families’ back-to-school spending. Computers and hardware are expected to account for just 13 percent of that spending, and supplies account for 22 percent.
One way to cut that cost is with your rewards credit cards, which can ring up cash back or miles for future family travel with every purchase of school clothes, pens, computers and dorm room gear.
Here are three savvy card strategies to make the most of your back-to-school spending:
1. Year-round cash back helps cut school-related costs.
Lori Pena, of Hamilton, New Jersey, plans for back-to-school all year long, charging as much as she can to get the biggest possible haul of cash back.
“We have racked up about $350 in cash back using our Citi Double Cash Card, and it didn’t take much effort to do this with three kids,” Pena says.
“I sometimes apply for a travel rewards card when summer starts, and spend that time meeting my spending requirements with summer travel and back-to-school shopping,” she adds. “By the time September rolls around, I have earned new rewards for future travel, and I use the cash back feature of the Citi card to apply to the bill of the new travel rewards card.”Pena’s three children were in first, fourth and seventh grades at a private Catholic school at the time of this interview. Every year the family pays a $600-$700 re-registration fee and monthly tuition payments totaling $8,000 or so a year. The school also requires participation in fundraisers or “buyouts” if students don’t or can’t participate, Pena says.
The family also tithes, giving monthly donations to their church, local soup kitchens, the YMCA and other charities. Pena automates her family’s donations with a monthly credit card deduction for each charity.
And then there are the back-to-school expenses.
“I expect to spend between $200-$300 per child for back-to-school supplies, uniforms, shoes, etc,” she says. “Uniforms are not cheap, but the good thing is they hold up well and can be reused and passed down.”
Pena sets a back-to-school budget and sticks with it.
“Shoes and clothing are bought with coupons or on sale, and we usually get the shopping done a month before school so I don’t panic and buy too much,” Pena says.
Because of that $350 in cash back earned through the year, “in reality I am only going to spend about $250 on back-to-school shopping this summer,” Pena says.
“We are minimalist in our home and clothing, so this might not be in line with other parents’ spending habits,” Pena says, “but we tend to spend our money on travel and experiences and credit card rewards help us to achieve our goals.”
See related: Video: How to save on back-to-school shopping
2. Backpacks, uniforms can help you score a card’s sign-up bonus.
Credit card rewards enthusiast Lee Huffman, “chief bald officer” for BaldThoughts.com, says his back-to-school rewards strategy is all about timing.
“When I’m not refinancing our rental properties, I get new cards a few times a year,” Huffman says. “August is a time that I apply each year to coincide with paying school tuition in full, so I can get the discount, and back-to-school shopping so that it is that much easier to hit minimum spends.”
One of the cards in Huffman’s wallet is the Chase Freedom cash back card, which has a sign-up bonus of $150 after charging $500 on the card in the first three months.
With a typical family spending more than $500 for each child on back-to-school purchases, putting that on a new Chase Freedom card can bring in enough cash back to cut school-related expenses for one child by about a third.
“My favorite card is the one that earns me the most miles and points or best cash back toward the next vacation I am planning,” Huffman says. “With a wife and two kids, I need to earn enough for the four of us to fly to our next destination.”
Huffman’s children were 6 and 2 years old at the time he spoke to CreditCards.com. Timmy was entering first grade, and Scarlett was in day care.
“It’s a big year for Timmy becoming a first-grader, so we’re buying him a new backpack and school supplies,” Huffman says. “For back-to-school clothes, our focus really is shoes, socks and underwear, because his school requires uniforms every day and you can only buy the uniforms directly from them.
“The good thing is that the school accepts credit cards, so you know we’ll be earning some points on those purchases!” he adds. “August is a time that I apply each year to coincide with paying school tuition in full, so I can get the discount, and back-to-school shopping so that it is that much easier to hit minimum spends.”
See related: 5 apps to turbocharge your back-to-school savings
3. Use shopping portals to double-dip on card rewards.
Freelance writer Lyn Mettler, a mother of two and the founder of GoToTravelGal.com, says her back-to-school savings strategy depends on her travel goals at the time.
For Mettler, her spending and travel strategy are aimed at racking up points to earn a Southwest Airlines Companion Pass. Mettler has literally written the e-book on how to earn a Companion Pass.
“The first year I earned the points needed by signing up for two Southwest Chase Rapid Rewards credit cards [a consumer card and business card], spending on the card and shopping through the Rapid Rewards shopping portal,” she says.
Mettler, of Indianapolis, has two boys, who were in elementary school and in middle school at the time of this interview.
“Clothing is our biggest expense as my boys are at the age where they seem to be growing several inches a month,” Mettler says. “For clothing, we probably will spend $200. Thank goodness my younger son can wear my older son’s hand-me-downs, so the biggest expense is for my 13-year-old.
“Also, my middle school son runs cross country and inevitably needs new quality running shoes each year. That is something that is tough to discount or skimp on, so those end up running $60-$70.”
By using Southwest’s Rapid Rewards shopping portal for as many back-to-school purchases as possible, Mettler earns points that count toward qualifying for her next Companion Pass.
The portal “is one of the best and easiest ways to score free Southwest points,” she says. “It allows you to earn points on things you’d be buying anyway, and if you use your Southwest Chase cards, you can ‘double dip’ by earning points both through the portal and on the card.”
4. Bonus strategy: Create a back-to-school budget and stick to it.
Pena’s advice for anyone using rewards cards to maximize back-to-school shopping? Plan ahead.
Each year, she says she sees a ton of last-minute shoppers who buy entirely too many supplies and clothes in haste and rack up big bills before the first school bell rings.
“It is usually a stressful time, so having a strategy helps and making sure you stick to your budget will help you maximize your savings overall.”