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For many of us, our grocery budget is one of the driving forces in the household. If you have a big family, you know exactly what I’m talking about. Americans spend somewhere around 12% of their annual take home pay on food! That’s a whole lot of rewards points if you know which credit card to use.
Arm yourself with the best credit cards out there, and get ready to go grocery shopping.
Best Ways to Use a Travel Rewards Credit Card on Your Groceries
The first step in maximizing the return on your grocery expense is making sure you have the right card. You’ll want to make sure you have a credit card that earns at a high rate on grocery stores. There are some great grocery cards on the market, and many without annual fees. With a no annual fee travel credit card, look for 2-3x miles/rewards points. Or, 2-3% cashback on cashback rewards card. Remember, “cash is king”. All this means you want a card with groceries listed as a bonus category. I tend to use my American Express Gold card when I buy groceries, for 4x Membership Rewards on up to $25,000 in spend at grocery shopping per year. In general, we think the Gold card from American Express is a great card for foodies!
Another good option is any of the 5% rotating bonus category cards on the market. Credit cards like the Chase Freedom and Discover it typically list groceries for at least one quarter out of the year, giving you the chance to earn some serious rewards points. During the corresponding quarter, you can rack up some serious Chase Ultimate Rewards with your Freedom card(s).
Be aware that not all grocery stores are treated equal in the eyes of the credit card issuer. If you usually buy your groceries at a chain like Walmart or Target, those don’t typically code as groceries. Chase (or whatever you’re swiping) doesn’t know if your buying bananas or a new Xbox, and won’t reward you for grocery purchases. Same goes for wholesale clubs like BJ’s and Costco, those will almost never count as groceries.
The main benefit to using your travel card for groceries is to rack up points fast with a bonus category! The more spend you can put on your credit cards, the faster you accumulate rewards points. (Just be sure to stay on top of your expenses. Use that credit card responsibly!) As long as the benefits of your rewards card and the rewards points you earn outweigh the annual fee, you’re in good shape.
How to Maximize Earning Opportunities for Travel Points When Buying Groceries
I’m sure I’m not the first one to say this, I think you should put ALL of your eligible purchases on credit cards, every day. Whenever you make an eligible purchase without a credit card, you’re effectively missing out on the subsidized cost of the rewards that everyone else is getting! I’ll spare you before we fall down the rabbit hole…
(Obligatory warning – the above advice is ONLY GOOD if you pay off your balances by every due date, and thus avoid interest. . Of course, use a cashback card any time that’s more important, or a better rate. We’ll want to compare cashback to cents per point. Say your travel rewards card earns double miles on groceries, and those miles are worth roughly 1.5 cents each. That brings the value of the card to 3% cashback. Definitely use the travel card instead of your Citi Doublecash, which will only earn 2% cashback! Figure out the real earn rates for all of the cards in your wallet, and you’ll be well-armed for grocery shopping.
Quick note: you can get around inconvenient bonus category restrictions with gift cards! The idea is simple. Buy a grocery gift card from another store, that you do have a bonus category for, then use the gift card for your regular grocery shopping. The credit card company awards you points for the spend at the bonus category store, and then you take the gift card to your grocer. (This also works in reverse, pick up gift cards to the other stores with your grocery bonus card to supercharge your reward points!)
I boil down the earning opportunities into two buckets. The first is the regular earn on the credit card, as outlined above. Once you’ve mastered that, make sure you take advantage of any limited time promotions that come up with the rewards card. There are a lot of these if you’re paying attention! Some examples include AmEx Offers, Chase Offers, increased earning opportunities, and more. Most of the major credit card issuers will send out promos a few times each year.
In the past, I’ve taken advantage of some great AmEx Offers for mealkit delivery, which definitely saved me some grocery dollars. Plus, it was fun to try some new recipes! These bonus offers can help stretch your grocery budget. Unfortunately, the offers aren’t often for regular grocery stores, but for delivery, mealkits, or restaurants. Often pricier than regular grocery shopping, but it might be worth a shot!
At the very least, be sure to always use a credit card with groceries as part of its bonus categories.
How to Find the Right Travel Card for You to Earn Points Buying Groceries
Don’t forget, you have to actually be able to use the rewards points too. A Hilton Honors credit card from AmEx earns 5x on grocery spend, but that won’t help a loyal Marriott customer! It helps to determine what rewards currency you want to use. Bonus points (literally) if you can capitalize on a new card and snag a good welcome bonus. I tend to steer people towards one of the main transferrable currencies for flexibility. That means Chase Ultimate Rewards, Citi ThankYou Points, or AmEx Membership Rewards. Each of these programs has good grocery card options.
If you have a certain hotel or airline you use frequently, it may make sense to open a cobranded credit card. Especially for the extra benefits! That Hilton Honors card I mentioned earlier? Automatic Hilton Silver Status. Spring for the Hilton Surpass or Hilton Aspire cards for much better benefits. Always keep an eye on those annual fees though. At $450 per year, make sure the Aspire is worth it.
For what it’s worth, I’m not sure there are any grocery rewards specific credit cards out there. That is, I don’t know any issuers that partner with grocery chains to issue a store-branded rewards card. Prove me wrong in the comments! I do, however, sign up for all the local grocery points systems and coupon accounts. A little extra savings can go a long way.
The best rewards card to use at your grocery store really boils down to personal preference, but here are some rules to live by:
- Get a credit card that earns at least 3x/3% back on your groceries.
- Confirm there’s no maximum on what you can earn (or at least you won’t hit the maximum in a calendar year).
- Make sure the rewards points you’re earning are useful to YOU. Who cares if everyone loves Ultimate Rewards Points if all you want is cashback??
So, how do you guys earn reward points on your grocery bills?
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