I know I’ve harped on this a bit lately, but with travel just a dream for many of us, rather than a reality. Some day soon, hopefully we’ll get back in the air (and be able to take advantage of all these great fare deals!).
Ok, ok…maybe I’m just bitter. I’ve been grounded since December 2019! Whether it’s good or bad, I still have a pile of credit card points, airline miles, hotel rewards, and anything and everything you can track on AwardWallet. I’ve found myself looking for more ways to use them up now, even if it’s not for travel. Hey, those miles aren’t earning any interest in there, right? One of the most common questions right now from friends and family, is how to use credit card points for groceries. Everybody’s gotta eat!
Let’s dig into it, so you can dig in!
Best Ways to Use Travel Card Rewards on Your Groceries
Alright, I’m going to outline a few major ways to use your travel cards on groceries. First things first, any hotel or airline cards probably won’t work for any of these strategies. You’re more limited on redemption options, and airlines aren’t know for making their miles very flexible.
So you have a bunch of points, and the fridge is empty. You’d rather used up the points than your hard earned cash. Fair. Quick disclaimer, this usually isn’t the BEST option from a “cents per point” perspective. You know that, I know that, now we can move on. There are two main ways to use your travel points on groceries: either redeem your points for gift cards or cash equivalents (to spend on those groceries) or redeem your points as statement credits (after you’ve bought the groceries).
I’ll use AmEx Membership Rewards as the example here. When I login and redeem points, AmEx gives me many options in the Dining category, but no true grocery stores. Unfortunately, this is pretty common. You can however, cash in points for a gift card to Target, Walmart, or Sam’s Club, which should all cover groceries in most stores. You could also get an AmEx Gift Card, and your local grocer will happily accept that. Expect to see similar options in the Citi ThankYou Points and Chase Ultimate Rewards redemption centers.
Second, you can pay for your groceries with your credit card, and then redeem your points to cover the charges. This has the small added benefit of earning extra points on the purchase, so you accumulate rewards points faster! For example, AmEx allows you to redeem Membership Rewards at a rate of around 0.6 cpp against charges, and Citi gives you 0.5 cents per point in statement credits. Neither provide tremendous value, but both fill your cupboard.
How to Find the Right Rewards Credit Card for Grocery Purchases
Ok, so now we know how to effectively use our credit cards fro grocery purchases, but what about which card to use? How do you know what to pull out of your wallet? Or if you’re addicted to the card game, which one to pull out of your sock drawer and dust off?
The most important, and most obvious, part of the decision, is to get the highest earn rate you can for your cards.
Next up, what currency do you want to earn? Feel free to keep it simple and stick with a cashback card if you’d like to. For cashback, make sure you’re using a card that earns greater than 2% cash on groceries. You should always use 2% as our baseline for cashback. Don’t EVER use a credit card that earns less than 2% on any category. It just doesn’t make sense! There are a few $0 annual fee cards on the market that earn 2% cashback on every purchase, so never settle for less. For me, that means my Capital One Savor for 2% back on groceries, or my Discover it during a quarter where it offers 5% back. (There are definitely better cards to use than the Savor for groceries. Check out the AmEx Blue Cash Everyday for 3%.)
(SEE ALSO: Top credit card offers)
If you’re opting for a travel rewards credit card, it’s a bit trickier. First, make sure you’re earning travel rewards you can actually use. For instance, I’m partial to Hilton hotels, so I like to earn points on Hilton cards. Similarly, my home airport is Boston Logan, so it makes sense for me to stick to airline cobranded cards with a good footprint at BOS. This means JetBlue and Delta, though there are options for every major US airline there. Then, the same logic applies from above. Get the most for your dollar that you can! Transferrable currencies always have an edge over airline miles or hotel points, due to their flexibility. I like to simplify things by assuming almost all points are about equal. Let’s give them a base level of 1.5 cents* per point. Then, I’m just looking for the highest earn rate on groceries. That’s where my AmEx Gold card comes in: 4x Membership Rewards on groceries.
For savvy cardholders, here’s a loophole for bonus rewards categories on your cards. Gift cards! It’s easy. Pick up a grocery gift card from a store where you do have a bonus category. Then, use the gift card for your regular grocery shopping. The credit card company awards you points for the spend at the first (bonus category) store. (This also works in reverse. Pick up gift cards to your other stores at your local grocery store. Use your grocery bonus card to supercharge your reward points!)
*I know this doesn’t always work. All of you cpp purists will yell at me in the comments… But sometimes it’s best to simplify things to make a good decision! The only exception I make to my simplification rule is Hilton. I usually assume it takes 2 Hilton points to hit that 1.5 cpp value. In other words, Hilton points are half as valuable as most of my other currencies.
Take Advantage of Special Grocery Promotions
I love stacking deals, so any time there are promotions for things I’d buy anyway I go for it. Think extreme couponing, but without all the paper. Right now, credit cards companies are sweetening the deal for a lot of consumers too. All those travel benefits that PWaC readers love on their credit cards have become less useful lately. The major issuers know that, and have pivoted the benefits to help folks with their takeout and grocery bills during the pandemic. Here are a few examples:
AmEx has established a GREAT list of dining credits for their cards. All of the high-tier cobranded cards will receive a $20 dining credit, and the lower cards will receive a $10 or $5 credit monthly. Check out our write up here for a bit more detail!
Last year, Chase also introduced a “Pay Yourself Back” feature for cardholders in the Ultimate Rewards points family. Luckily they’re continuing this through at least April 30th of this year. Here’s how it works: Pay for your dining, groceries, or home improvement purchases with your Chase Ultimate rewards card, and then use your points towards a statement credit on that card. Unfortunately, you can no longer currently redeem your Ultimate Rewards for grocery purchases, but you can look for similar opportunities in the future.
What are your best tips for using rewards for grocery purchases? Leave them in the comments
Points With a Crew has partnered with CardRatings for our coverage of credit card products. Points With a Crew and CardRatings may receive a commission from card issuers. Responses are not provided or commissioned by the bank advertiser. Some or all of the card offers that appear on the website are from advertisers and that compensation may impact on how and where card products appear on the site. Any opinions expressed in this post are my own, and have not been reviewed, approved, or endorsed by my advertising partners and I do not include all card companies, or all available card offers. Terms apply to American Express benefits and offers and other offers and benefits listed on this page. Other links on this page may also pay me a commission - as always, thanks for your support if you use them
User Generated Content Disclosure: Points With a Crew encourages constructive discussions, comments, and questions. Responses are not provided by or commissioned by any bank advertisers. These responses have not been reviewed, approved, or endorsed by the bank advertiser. It is not the responsibility of the bank advertiser to respond to comments.