Which Credit Card is Best for Grocery Shopping?
We all buy groceries. In fact, it’s one of the most consistent expenses in any household budget. According to the U.S. Bureau of Labor Statistics, American households spent an average of $5,703 annually on groceries in 2022. That’s roughly $110 per week. However, this figure can vary significantly depending on various factors like household size, dietary preferences, geographic location, and economic conditions. For some families, grocery expenses can soar well above the national average, easily surpassing $200 weekly.
With such a large portion of our budget allocated to groceries, it’s crucial to optimize our spending whenever possible. This is especially true if you’re trying to plan a free theme park vacation. Every little bit helps!
One strategy to save money is using the best credit card for grocery shopping. Earning rewards on grocery purchases might seem trivial, but they can have a big impact. Even a seemingly modest difference in reward rates, like 1% versus 3%, can translate into significant savings annually.
How to Choose a Credit Card for Groceries
Choosing the best credit card for groceries isn’t complicated. You just need to consider a few things.
Reward Structure
What type of rewards do you want? If you prefer cash rewards, consider a cash back credit card. If you’d like flexible rewards that can potentially be transferred to travel partners, then you’ll want a flexible rewards card. For optimum savings, look for credit cards that offer bonus rewards specifically for grocery store purchases.
Limits
Some credit cards with bonus rewards for grocery spending have yearly limits. You may earn an elevated rate on the first $5,000 of grocery spending, for example, but any spending after that would be at a decreased rate. Think about how much you typically spend each year on groceries before choosing a card. Keep in mind that some credit cards do not categorize spending at stores like Target and Walmart as grocery.
Annual Fees
Consider whether the credit card charges an annual fee and whether the rewards and benefits justify this cost. Some cards with lucrative rewards may have annual fees, while others offer competitive rewards with no annual fee.
For example, let’s compare the Blue Cash Everyday (no annual fee) and Blue Cash Preferred ($95 annual fee) from American Express. For the first $6,000 of grocery spending, the Blue Cash Everyday Card earns 3% back while the Blue Cash Preferred Card earns 6%. If you spent $6,000 annually on groceries, or about $115.38 each week, you’d earn $180 with the Blue Cash Everyday and $360 with the Blue Cash Preferred, or $265 after deducting the annual fee. In this case, paying the fee would be worth it since you’d earn more cash back.
Sign-Up Bonuses
Many credit cards offer generous sign-up bonuses. These bonuses generally require a minimum spending threshold within the first few months of account opening. Some credit cards also offer to waive the first year’s annual fee. A new cardmember bonus and a waived fee are great incentives to try out a new card. After a year, you can evaluate whether the card works well with your spending.
Best Credit Cards for Groceries
Blue Cash Preferred® Card from American Express
Earn 6% cash back at U.S. supermarkets, up to $6,000 spent annually. $0 fee the first year, then $95. Sign-up bonus offer. (affiliate offer)
Blue Cash Everyday Card from American Express
Earn 3% cash back at U.S. supermarkets, up to $6,000 spent annually. No fee. Sign-up bonus offer. (affiliate offer)
Citi Custom Cash® Card
Earn 5% in your highest-spending eligible category each month (up to $500), including grocery stores. No fee. Sign-up bonus offer.
American Express Gold Card
Earn 4x Membership Rewards points per dollar spent at U.S. supermarkets, up to $25,000 spent annually. $250 fee. Sign-up bonus offer. (affiliate offer)
SavorOne® Rewards Card
Earn unlimited 3% cash back at grocery stores. No annual fee. Sign-up bonus offer.
Store Specific Cards
Target RedCard™
5% off every day at Target and Target.com. Sign-up bonus offer.
Conclusion
Choosing the best credit card for grocery shopping can significantly impact your overall budget and help you save money. Simply evaluate your spending habits, compare credit card offers and earning rates, and choose the one that’s right for you.
About the Author
Written by H. Kinney, author of How to Plan a Free Theme Park Vacation. She writes about using points, miles, and cash-back rewards to reduce the cost of theme park travel.
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