Guide to maximizing bonus categories – grocery stores
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Every purchase is an opportunity to earn travel rewards — and to boost your loyalty account balances. That means it’s important to maximize your return on each dollar. With travel currently at a standstill due to the coronavirus outbreak, now is the time to earn points and cash back on essentials that you’ll be paying for at grocery stores.
The average American household will spend between $150-300 each week on groceries, and that’s likely even higher during the pandemic. If you’re at the high end of that range, you’ll spend upwards of $15,500 annually at the supermarket. That’s a large chunk of spending, and with the right approach, it can earn you an equally large chunk of points and miles. Let’s look at the different credit cards and tools you can use to maximize every dollar of your spending at the grocery store.
Related reading: Guide to maximizing bonus categories: Gas purchases
Grocery store shopping: General Tips
1. Know the limits of your particular rewards, both in terms of earning and redeeming. For example, some credit card bonuses are capped, such as the $1,500 quarterly limit for 5% bonus categories on the Chase Freedom card.
2. The merchant category code determines whether a particular purchase will earn you bonus points. If you’re uncertain how a given merchant is coded, I recommend testing it with a small purchase. You can then examine your card statement to see whether the merchant in question codes properly. For example, grocery purchases at Walmart and Target are not categorized as groceries on some rewards credit cards.
3. Don’t override common sense and the bottom line of your grocery bill. If shopping at Walmart for groceries saves you a significant amount of money over your local grocery chain, then you might be better off sticking with those savings and not bothering with a credit card that offers a bonus for grocery purchases. Do the math and make sure that you’re not paying more than you should to earn rewards.
Credits Cards For Groceries
The Chase Freedom offers 5x cash back (or Ultimate Rewards points) on a rotating set of categories each quarter. From April 1, 2020, through June 30, 2020, the Chase Freedom’s bonus category includes, you guessed it, grocery stores. Keep in mind this is capped at $1,500 in purchases each quarter.
And even if you can’t hit the $1,500 amount, many grocery stores sell non-grocery items. Most issuers, Chase included, don’t count superstores like Walmart and Target or warehouse clubs like Costco and Sam’s Club in the “grocery store” bonus category.
Related Reading: The best no-annual-fee credit cards
The Amex Gold Card is my go-to card for grocery store purchases, with 4x Membership Rewards points for every dollar spent (up to $25,000) at U.S. supermarkets every year (then 1x). That’s a huge multiplier for every day spend at grocery stores nationwide. Plus, there is incredible versatility to use those Membership Rewards points with the ability to transfer to an array of airline and hotel partners.
This card gives you three Membership Rewards points per dollar spent on up to $6,000 of grocery purchases each year, and one point per dollar beyond that. Additionally, if you hit 30 transactions per month on the Everyday Preferred card, you get a 50% bonus on all points earned, so you could effectively earn 4.5 points per dollar. Membership Rewards are worth 2 cents apiece in TPG’s valuations. If you spend $15,000 annually at grocery stores and you hit the monthly bonus, you could earn 40,000 points each year just on purchases at US supermarkets, worth $800. The card has a $95 annual fee, so your net value earned could be in the neighborhood of $700.
The information for the Amex EveryDay Preferred Card has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.
This card offers 6% cash back on the first $6,000 in purchases at U.S. supermarkets annually, and 1% on all purchases thereafter. The 6% return on the first $6,000 would earn you $360 cash back. The annual fee for the card is $95 (see rates & fees). I would only recommend this card if you’re topped out on Membership Rewards points that you can use in the foreseeable future, or if you’ve already maxed out the bonuses on other cards.
The Hilton Honors American Express Surpass Card earns 6x points per dollar spent at U.S. supermarkets. Notably, this card also comes with Hilton Honors Gold status — getting you complimentary breakfast, space-available room upgrades up to Executive rooms and improved Honors earnings.
Related Reading: Hilton Honors American Express Surpass Card review
The Citi Rewards+ is a no-annual-fee card which offers 2x points at grocery stores (on the first $6,000 per year; then 1x), as well as two pretty unique features. First, it rounds the earnings on all purchases to the nearest 10 points. Yes, your $1 banana at the grocery store can get you 10 points. Second, it gives you 10% back on the first 100,000 points you redeem each year.
Related Reading: Citi Rewards+ Plus credit card review
Of course, any strategy you have for points and miles should be goal-specific. Regardless of the strategy you use to maximize your grocery purchases, it’s great to have a certain travel redemption in the back of your mind for the points or miles you’re earning.
Additional reporting by Chris Dong
Featured photo by Shutterstock
For rates and fees of the Blue Cash Preferred card, click here.