Guide to maximizing rewards on grocery spending
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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 spent. 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.
3 Must-Know Tips
1. Know the earning limits of your particular rewards card. For example, the 5% bonus categories on the Chase Freedom card (No longer open to new applicants) is capped at $1,500 per quarter. Have a back-up card ready for when you exceed this limit.
2. Be aware of merchant category codes. 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 wholesale clubs like Costco are not categorized as groceries on some rewards credit cards. However, some cards may code grocery delivery services like Instacart as grocery stores on your statement. And because Instacart also delivers items from a wide variety of stores, including Costco, etc., there are opportunities to maximize a bonus from stores not typically associated with that category.
3. Shop where you save. 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 than shopping at grocery stores to earn a category bonus. Do the math and make sure that you’re not paying more than you should to earn rewards.
Related Reading: Your definitive guide to online grocery delivery services
Credits Cards For Groceries
Ready to start earning some miles? These credit cards offer the biggest return on your grocery spending:
The Chase Freedom offers 5x cash back (or Ultimate Rewards points) on a rotating set of categories each quarter. From Apr. 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.
The information for the Chase Freedom 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.
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). Terms apply. That’s a huge multiplier for everyday spend at grocery stores nationwide. Plus, there is incredible versatility when it comes to using Membership Rewards points: You can redeem points for cash back rewards, book through Amex Travel or transfer them to an array of airline and hotel partners.
Related Reading: Amex Gold Card review
This card gives you 3 Membership Rewards points per dollar spent on up to $6,000 at U.S. supermarkets each year, along with 1 point per dollar beyond that. Additionally, if you hit 30 transactions per month, you get a 50% bonus on all points earned. So you could effectively earn 4.5 points per dollar spent at supermarkets.
Membership Rewards are worth 2 cents each according to TPG’s valuations. If you spend $15,000 annually at U.S. supermarkets and hit the monthly bonus, you could earn over 40,000 points each year – 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.
The Blue Cash Preferred earns 6% cash back on the first $6,000 in purchases at U.S. supermarkets annually and 1% on all purchases thereafter. Terms apply. The 6% return on the first $6,000 would earn you $360 cash back. The card has a $0 introductory annual fee for one year, then $95. Offer Expires 12/10/2020 (see rates & fees). I would only recommend this card if you’ve already maxed out the bonuses on other cards and don’t anticipate a future need for Membership Rewards points.
Related Reading: American Express Blue Cash Preferred Card review
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 ThankYou points at supermarkets (on the first $6,000 per year; then 1x ThankYou point), 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
Online shopping portals are an easy way to earn extra points, miles, or cash back on purchases you’re already making. At its most basic level, instead of going directly to a merchant, you would navigate to a “shopping portal,” search for the retailer you want to purchase from and click through to that site. The best part is that you still earn rewards based on the card that you use. That means, in many situations, you can “double dip” your earnings with both a shopping portal bonus and a category bonus, like on groceries.
Related Reading: Guide to online shopping portals
There are dozens of different online shopping portals — but they all essentially operate the same way. One site that I use all the time is Cashback Monitor, a shopping portal aggregator that compiles a list of reward comparisons.
Related reading: Guide to maximizing bonus categories: Gas purchases
Besides apps directly from stores like CVS and Target (both offer coupons), there are a handful of third-party apps that can help you maximize your grocery spending. Ibotta, for instance, gets you cash back both in-store and online from dozens of supported retailers and grocery stores with a coupon function.
Dosh helps you earn cash back by having users directly link a credit card (like the list of cards above) to your account on the Dosh app. Then, any time you shop at participating retailers with that associated card, you’ll see savings of up to 10% for each purchase.
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. With this list of credit cards, shopping portals, and mobile apps, you should be well on your way to maximizing your spending on groceries.
Featured photo by Shutterstock
For rates and fees of the Blue Cash Preferred card, click here.
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WELCOME OFFER: 60,000 Points
TPG'S BONUS VALUATION*: $1,200
CARD HIGHLIGHTS: 2X points on all travel and dining, points transferrable to over a dozen travel partners
*Bonus value is an estimated value calculated by TPG and not the card issuer. View our latest valuations here.
- Earn 60,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $750 toward travel when you redeem through Chase Ultimate Rewards®
- 2X points on travel and dining at restaurants worldwide, eligible delivery services, takeout and dining out & 1 point per dollar spent on all other purchases.
- Get 25% more value when you redeem for travel through Chase Ultimate Rewards®. For example, 60,000 points are worth $750 toward travel.
- With Pay Yourself Back℠, your points are worth 25% more during the current offer when you redeem them for statement credits against existing purchases in select, rotating categories.
- Get unlimited deliveries with a $0 delivery fee and reduced service fees on orders over $12 for a minimum of one year on qualifying food purchases with DashPass, DoorDash's subscription service. Activate by 12/31/21.
- Earn 2x total points on up to $1,000 in grocery store purchases per month from November 1, 2020 to April 30, 2021. Includes eligible pick-up and delivery services.