The key is using the right cashback strategy.

Black Friday is the biggest shopping event of the year, and while you’re hunting for deals, your credit card could be your best ally in saving even more money. The key is using the right cashback strategy. When it comes to personal finance, using credit cards for Black Friday can be a smart move if you pay your balance in full, but which type of card is best? The debate often comes down to two contenders: flat-rate cashback cards and bonus category cards. Let’s break down which one might be the champion for your holiday shopping spree.

What Are Flat-Rate Cashback Credit Cards?

A flat-rate cashback card is the essence of simplicity. It offers the same percentage of cash back on every single purchase, regardless of where you shop or what you buy. Typically, these cards offer 1.5% to 2% back on everything.

Pros: They are incredibly easy to use. There are no categories to track, no spending caps to worry about, and no need to enroll in anything. Every dollar you spend earns a predictable reward.
Cons: The cashback rate is generally lower than the top rates offered by bonus category cards. You might be leaving money on the table if your spending is concentrated in specific areas.

Best for: The shopper who values simplicity and whose Black Friday list includes items from a wide variety of retailers that don’t typically fall into standard bonus categories.

What Are Bonus Category Cashback Credit Cards?

Bonus category cards offer a high percentage of cash back, often 5%, but only on purchases made in specific categories. These categories can be fixed (like 3% on dining all year) or rotate every quarter (like 5% on Amazon.com and department stores from October to December). You usually need to “activate” or enroll in these rotating categories each quarter.

Pros: They offer the potential to earn a significant amount of cash back quickly if your spending aligns with the bonus categories. A 5% reward rate can make a huge difference on large Black Friday purchases.
Cons: They require more effort. You have to keep track of the current categories, remember to activate them, and be mindful of quarterly spending caps (e.g., 5% back on the first $1,500 in spending).

Best for: The organized shopper who plans their Black Friday spending at specific stores and can align those purchases with the card’s high-reward categories.

How to Choose the Best Strategy for Your Black Friday Shopping

Deciding between these two options comes down to analyzing your shopping list. Here’s a simple way to figure it out:

Review Your Shopping List: Where do you plan to spend the most money? Are you buying a new laptop from a big-box electronics store, clothes from several department stores, or a variety of gifts from Amazon?
Check the Bonus Categories: If you have a bonus category card, log in to your account and check which categories are active for the last quarter of the year (which includes Black Friday). Common categories include department stores, Amazon.com, Walmart, and PayPal.
Do the Math: Let’s say you’re spending $1,200 on Black Friday.
- If most of that spending is at department stores and your card offers 5% back in that category, you’d earn $60. A 2% flat-rate card would only get you $24.
- However, if your spending is spread across various online boutiques, local shops, and other retailers that don’t fall into a bonus category, the 2% flat-rate card is the clear winner, earning you $24 while the bonus card would likely only earn 1% ($12) on those purchases.

A great way to prepare is by refining your spending habits ahead of time. Understanding the difference between needs vs. wants can help you create a focused shopping list, making it easier to plan your credit card strategy.

Tips for Maximizing Your Black Friday Cashback

Use a Mix of Both: Who says you have to choose? If you have both types of cards, use the bonus category card for all eligible purchases up to the spending cap. For everything else, use your reliable flat-rate card.
Activate Your Categories Now: Don’t wait until you’re at the checkout. Log in to your credit card portal today and make sure your Q4 bonus categories are activated.
Don’t Overspend for Rewards: The most important rule of personal finance is to not spend more than you can afford. Cashback rewards are only a benefit if you’re not paying high-interest charges on your balance. A solid budgeting guide can help you stay on track.

The Verdict

So, what’s the final call? If you’re a strategic shopper who plans to make big purchases at a few specific retailers that match up with 5% bonus categories, a bonus category card is your ticket to maximizing rewards. If you prefer simplicity, or your shopping list is long and varied, a high-rate flat-cashback card is the stress-free way to guarantee solid returns on every dollar you spend. Either way, a little planning can turn your Black Friday spending into a rewarding financial move.