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Best Cash-Back Credit Cards for Holiday Shopping

11/16/2012 05:41 pm ET | Updated Jan 16, 2013

The economy is recovering and America is going to spend that extra money on holiday shopping. The average American plans to spend $854 on gifts this year for the holidays, which is about $200 more than last year. And that's not even counting Thanksgiving and Christmas dinner, decorations, holiday parties and all the other extras that come along with the holidays.

If you're are going to spend so much money on a few days of merriment, why not make a little holiday cash for yourself? Cash-back credit cards are never more effective than during the holiday season. Putting all those big-ticket items on your cash-back cards can reap some nice rewards, if you choose your cards carefully. Not all cash-back credit cards are created equally. Some have greater rewards for grocery shopping. And some have bonus categories that rotate quarterly, earning you greater rewards when you shop online or at places like Macy's from now through December.

So how do you make the most out of your spending this holiday season? I've done the research, compared the reward rates* and picked the best cash-back credit cards for every holiday shopping situation:

Best Card for Thanksgiving and Christmas Dinner Shopping: Blue Cash Preferred Card from American Express

It gets expensive buying food to host a big meal for your entire extended family, doesn't it? If you need a little relief from that grocery store sticker shock, try this card. It gives you 6 percent cash back on the first $6,000 of purchases at U.S. stand-alone supermarkets in a calendar year and a bonus $150 cash back after spending $1,000 anywhere in the first 3 months. Note that there is a $75 annual fee, so it's a better deal if you use the card year round.

Best Card for Online Shopping: Discover More Card

Online shopping is just more convenient than battling the crowds at physical stores, but it often gets overlooked by the credit card companies when it comes to cash-back rewards. This is the only card I've found that gives you cash back specifically on all online shopping during the holidays. You can get 5 percent cash back on up to $1,500 in purchases on ALL online shopping, as well as department stores, through December. This card is not the best choice for other purchases, though, since you only get .25 percent cash back on other purchases until you spend $3,000, and then it only goes up to 1 percent.

Best Card for Electronics and Toy Shopping: Citi Dividend Platinum Select Visa

What does every kid want for Christmas? Toys. And what does every adult want? Electronics. You're spending a lot on each this holiday anyway, you might as well get something in return. With this card, you get 5 percent cash back on both electronics store and toy store purchases through the end of December. Just be careful, the card maxes out at $300 cash back in a calendar year, which doesn't include the $100 cash back you get after spending $500 in the first 3 months.

Best Card for Travel Shopping: Chase Freedom Visa

The holidays are the busiest time for traveling, and the most expensive. This card actually gives you 5 percent cash back on all hotels and airlines through the end of December, so you can take advantage of your travel plans. It also gives you $100 cash back after spending $500 in the first 3 months, which can be helpful in paying off all those holiday travel bills.

Best Card for Overall Shopping: Capital One Cash Rewards

If you need a cash-back credit card for all of the above, this card is a great choice. It has a 1.5 percent effective cash-back rate on all purchases, so you get cash back on everything. It manages the high 1.5 percent effective rate by giving you 1 percent cash back on all your purchases and an extra 50 percent bonus on the cash back you earn annually. You also get $100 cash back after spending $500 in the first three months.

If you are looking for a great cash-back card to use year-round, then the math gets a little more complicated, after factoring in annual fees, bonuses and whatnot. If you need help wading through all of that complicated math, this Cash-Back Credit Card Calculator lets you plug in your monthly spend on categories like grocery stores, department stores, gas stations, etc. and will calculate which cash-back card is best for your annual spending habits. Happy Shopping!

*Each card was picked solely on their cash-back rate for a given category and does not factor in fees, bonuses, etc.

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