Charging child care expenses and other related fees to the right card can potentially be a smart strategy. Depending on the card you use, you may be able to earn hundreds of dollars a year in cash back, travel or other perks, helping shave the cost of care.
If you have young kids and work full-time, there’s a good chance that you spend a substantial amount of money each month on child care, school fees or other ongoing expenses.
According to Childcare Aware, the average annual cost of child care can run as high as $10,000 to $16,000 or more, depending on where you live. Meanwhile, parents of school-aged kids are often asked to pay for field trips, school supplies and other costs. In addition, some parents have to budget for after-school care, sports and other pricey extracurriculars.
If you, too, are budgeting hundreds of dollars a month for child care or other fees, you may be tempted to charge some of those expenses to your cards whenever possible – especially if you need to spread out your payments over time or want to maximize your rewards earnings.
Here are some of the best credit cards for charging child care expenses, depending on the rewards you’re seeking and how you plan to use your credit card.
Best cash back card: Chase Freedom Unlimited
With this no-annual-fee cash back card, you’ll get a solid 1.5% cash back on all purchases (including child care purchases). That’s enough to net you at least $180 a year if you typically spend around $1,000 a month on child care or at least $360 a year if you have multiple kids and spend more than $2,000 a month.Additionally, you’ll earn 5% cash back on Lyft purchases (through March 2022), 5% cash back on travel purchased through Chase Ultimate Rewards and 3% cash back on dining and drugstore purchases.
You can also use the cash back you earn on this card as Ultimate Rewards points, which are some of the most valuable rewards in the travel credit card space.
The Chase Freedom Unlimited card also offers a 0% intro APR on new purchases for up to 15 months from account opening (with a variable APR of 14.99% to 23.74% thereafter), giving you the opportunity to temporarily spread out your payments without incurring any interest.
Runner-up: Citi® Double Cash Card
The Citi Double Cash card is also a good pick for miscellaneous expenses and is a particularly good long-term credit card. If you can afford to pay off your purchases in full, you’ll get up to 2% cash back on everything you charge (1% when you spend and 1% when you pay), including day care expenses and school fees.
That’s an unusually high rewards rate for a no-annual-fee card, and it can add up quickly. The Citi Double Cash card doesn’t offer a promotional APR on new purchases, though, nor does it offer a sign-up bonus.
Best travel card: Discover it Miles
If your child care provider accepts Discover, then this no-annual-fee travel miles card could potentially net you even more value in the first year than the Chase Freedom Unlimited card – especially if you use it for all or most of your purchases.
Thanks to a generous introductory offer, you’ll essentially earn 3 miles for every dollar you spend in your first year. And unlike the Freedom Unlimited card, the Discover it Miles card doesn’t cap your first-year earnings.
The Discover it Miles offers an unlimited 1.5 miles on every dollar that you spend and then matches 100% of what you’ve earned at the end of your first year. As a result, you could potentially collect up to $1,000 or more in travel, depending on how much you spend.
For example, if you spend $1,500 a month on child care expenses, $800 a month on groceries, $200 a month on restaurants and $300 a month on gas, you’ll earn $1,008 in travel miles by the end of your first year. If you charge just $2,000 a month, you’ll net $720 in travel.
After the first year, you’ll earn a respectable 1.5 miles for every dollar that you spend, which is still a pretty good rate for child care expenses that don’t typically earn a bigger bonus.
Runner-up: Chase Sapphire Preferred Card
This premium rewards card – which costs $95 a year to own – will only give you 1 point for every dollar that you spend on child care. However, Chase Ultimate Rewards points are unusually valuable – in part because there are so many good ways to use them.
For example, you could redeem them for travel using Chase’s Ultimate Rewards portal and receive a 25% points bonus. Or you could transfer them on a one-to-one basis to a wide variety of partner airlines and potentially get even more value out of your rewards points.
In addition, the Chase Sapphire Preferred card offers an awesome sign-up bonus that’s potentially worth up to $1,250 toward Chase travel. All you have to do is spend $4,000 in your card’s first three months in order to get the 100,000-point sign-up bonus – which shouldn’t be too hard to do if you’re already spending more than $1,000 a month on child care.
Best card for carrying a balance: Citi® Diamond Preferred® Card
If your kids’ expenses are stretching your budget and you need help financing their care, then you may want to use a card with a longer promotional APR than you can typically get on a rewards card. That way, you can put off paying interest – or potentially avoid it altogether.
The Citi Diamond Preferred card gives you up to 18 months from account opening to carry a balance interest-free during the intro period on purchases (APR of 13.74% to 23.74% variable thereafter).
The card also gives you 18 months of 0% intro APR on balance transfers if you’re looking to pay your existing credit card debt. After the intro period, there is an APR of 13.74% to 23.74% variable. The transfer will cost you 3% of the transferred amount or $5, whichever is higher. Balance transfers must be completed within 4 months of account opening.
Runner-up: Discover it® Cash Back
The Discover it Cash Back offers a shorter 0% intro APR period that some other cards – 14 months of no interest on purchases and balance transfers, and 11.99 to 22.99% variable APR thereafter. But the regular purchase APR is comparatively low, and with excellent credit you could get a regular interest rate as low as 11.99% variable.
Plus, the Discover it Cash Back is an excellent cash back product that earns earn 5% back on up to $1,500 in quarterly purchases in various rotating quarterly categories throughout the year after activation (1% thereafter) and 1% on all other purchases. On top of that, you’ll get a generous sign-up bonus: Discover will match all of the cash back you earn at the end of your first year with the card.
Child care is expensive. If you’re already planning to spend hundreds of dollars a month on care, then you might as well get some value from those charges if you can. Just be sure to draft a reliable budget so you aren’t surprised by debt you can’t afford.
Also, think twice if your child care provider charges a fee in exchange for accepting cards. If a day care charges a big convenience fee, then the rewards you earn may not be worth the extra cost.