Difference between revisions of "Best credit cards for grocery spending"
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| − | Grocery store rewards are often capped, partially to reduce the ability for people to use grocery store gift card tricks to earn extremely large amounts of rewards | + | Grocery store rewards are often capped, partially to reduce the ability for people to use grocery store gift card tricks to earn extremely large amounts of rewards and partially to put a limit on the amount the credit card company needs to pay out each year. If you naturally spend more than the cap, you may want to get multiple of these cards. |
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Revision as of 01:37, 7 May 2020
Make sure to read the tips and general advice in our Optimize Rewards by Using Different Cards for Different Purchases guide.
Almost everyone spends a significant amount of money on groceries, making it one of the top categories for bonus rewards. Be aware that the “supermarket” / “grocery” category usually doesn’t include groceries that are bought at general discount stores like Wal-Mart and Target (or at warehouse clubs like Costco). You’ll only get credit for purchases at standalone grocery stores.
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Card suggestions
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The Amex EveryDay Preferred card earns the highest reward rate on groceries and gas—but comes with some added complexity. During any month that you make at least 30 purchases with this card, you’ll get a 50% points bonus, giving you 4.5x Membership Rewards points on grocery purchases, valued at 6.75 cents per dollar, for groceries (and 3x points, valued at 4.5 cents per dollar, for gas). This is considerably higher than you get from any other card. While there are some tricks to make sure that you always make enough purchases to get the bonus rewards, it is something extra to worry about, and can take some extra time and effort. $95 annual fee. Tips to Generate More than 30 Charges per Month | |
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If you spend a lot at grocery stores, or just don't want to deal with the extra complexity of the Everyday Preferred card, the Amex Gold card is the best card for grocery spending. It earns 4x Membership Rewards, valued at 6 cents per dollar. But unlike the Everyday Preferred and Blue Preferred card, bonus rewards are capped at $25,000 worth of spending, instead of $6,000. If you are willing to put in the extra effort, you can augment your natural grocery store spending by buying gift cards at the grocery store, and using them at other businesses—earning up to 100,000 Membership Rewards points per year. The card has a hefty $250 annual fee, but comes with a $100 airline incidental credit, a $10/month credit at a number of different restaurants, and a 4x Membership Rewards bonus reward rate on restaurant spending. | |
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If you don't want to build up Membership Rewards points, the Blue Cash Preferred cards is a great option. It earns 6% cash back on groceries and streaming services (and 3% cash back on gas and transit). This isn’t as high as the EveryDay Preferred card or the Gold card, but you don’t have to worry about meeting the minimum transaction requirement, you get the rewards as cash, and you don't have to deal with frequent flyer programs to get good value from your points. $95 annual fee. | |
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If you already have the Altitude Reserve card, it probably isn't worthwhile getting another card just for grocery spending. You should be able to get 4.5 cents per dollar with the Altitude Reserve card at most grocery stores, by checking out with a mobile wallet. Assuming you maxed out the grocery benefits of the Blue Cash card, you would only earn an extra $90 per year, which is less than the annual fee. The EveryDay Preferred could earn an extra $40 per year (after the annual fee), but you’ll need to deal with extra complexity in both earning and redeeming your rewards, and in dealing with an additional card. The Altitude Reserve has a $400 annual fee, but you get an automatic $325 travel credit. | |
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If you spend less than $3 - 4,000 per year on groceries, and you don't have the Altitude Reserve card, you should probably stick to the regular version of the Amex EveryDay card. It earns 2x Membership Rewards points, valued at 3 cents per dollar on groceries; and 2.4x points, valued at 3.6 cents per dollar, assuming you make over 20 transactions per month. That’s less than the Preferred version of the card, but you don’t have to pay an annual fee. If you already have the Hilton Surpass Credit Card (for automatic Hilton Gold status), that is a good card to use instead. | |
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If you belong to Amazon Prime and shop at Whole Foods, you should consider the Amazon Prime Visa. It earns 5% back at Whole Foods and has no annual fee. It can be a good complement to another grocery store card, or even a good alternative to getting any of these other cards. The card also offers the highest reward rate at Amazon. |
Quick comparison
The point values used in the table below are estimates based on a typical traveler. They may need to be adjusted for your individual preferences and travel patterns. For example, if you highly value premium cabin award tickets and are willing and able to build up large point balances, Ultimate Rewards, Membership Rewards, and ThankYou points are much more valuable and you should earn as many of those types of points as you can. If you have trouble finding good frequent flyer redemptions, you might want to focus on cards that earn points that can be used more like cash. Deciding What Type of Points to Earn
The annual costs in the table below reflect the annual fee minus any travel credits. For travel credits that are harder to redeem, we value the credit at 50% of the maximum credit amount. We value the Amex Airlines Incidental Credit at only 25% of the maximum credit amount. If you are willing to do the work or are otherwise able to get full value from these credits, the effective annual fee can be considerably lower.
Some cards waive the annual fee for the first year. But the table focuses on what you would pay in the longer term.
Grocery store rewards are often capped, partially to reduce the ability for people to use grocery store gift card tricks to earn extremely large amounts of rewards and partially to put a limit on the amount the credit card company needs to pay out each year. If you naturally spend more than the cap, you may want to get multiple of these cards.
| Card | Value | Earns | Cap | Annual Cost |
|---|---|---|---|---|
| Amex Everyday Preferred (with 30+ transactions per month) |
6.75% | 4.5x MR | $6,000 | $95 |
| Amex Gold | 6% | 4x MR | $25,000 | $30-250 |
| Amex Blue Cash Preferred | 6% | 6% | $6,000 | $95 |
| Amazon (at Whole Foods only) |
5% | 5% | - | $0 |
| Amex Everyday Preferred (without the transaction bonus) |
4.5% | 3x MR | $6,000 | $95 |
| US Bank Altitude Reserve (on mobile wallet purchases only*) |
4.5% | 3x | - | $75 |
| Citi Premier | 4.5% | 3x TY | - | $95 |
| Amex Everyday (with 20+ transactions per month) |
3.6% | 2.4x MR | $6,000 | $0 |
| CNB Crystal Infinite (until 2020) |
3.3% | 3x | - | $150 |
| BOA Cash Rewards | 2-3.5%† | 2-3.5x | $10,000 | $0 |
| Amex Everyday (without the transaction bonus) |
3% | 2x MR | $6,000 | $0 |
| Amex Blue Cash | 3% | 3% | $6,000 | $0 |
| AARP | 3% | 3% | - | $0 |
| Consumers Credit Union Cash Rebate | 3% | 3% | $6,000 | $0 |
| Citi Rewards+ | 3% | 2x TY | $6,000 | $0 |
| JetBlue Plus | 2.6% | 2x miles | - | $0 |
| Hilton Surpass | 2.7% | 6x | - | $75 |
* If your normal grocery store(s) accept mobile wallets, you’re set. If you have SamsungPay, you should be able to use it any store that has a swipe machine.
† Cardholders with more than $20,000 in combined balances at BOA / Merrill Lynch earn bonus rewards, maxing out at 3.5 cents on grocery store purchases.
