Grocery store spending likely comprises a significant amount of your budget. The 2018 Consumer Expenditure Survey showed the average U.S. household spent $4,445 a year ($85 a week) on food at grocery or other food stores. If those purchases were made using a 2% cashback credit card, you would earn $89.28 cash back. However, if you used one of the best credit cards for groceries, you could earn between 3-6% cash back or points on your spending.
Beyond food and other household items traditionally sold at grocery stores, they can be some of the best places to manufacture spend. Many grocery stores sell Visa and MasterCard gift cards that can be purchased with a credit card. These cards can be liquidated through various methods in-store or online for a cost of 0% – 2.5%. Additionally, some grocery stores, Walmart and Meijer being most prominent, offer services where you can use these cards to purchase money orders. See my manufactured spending guide for more details.
As of February 15, the Rakuten Visa card no longer earns an additional 3x points on purchases of Visa and MasterCards through Giftcards.com and GiftCardMall.com. That leaves grocery stores, along with office supply stores if you have an Ink Plus or Cash card, as the only places to purchase gift cards with greater than 3%/3x earning potential. Unlike Giftcards.com and GiftCardMall, many grocery stores also offer discounts on these cards, and some will even allow you to earn store or gas rewards on these purchases.
This post will compare the best credit cards for groceries, their annual limits, and why it might be worth taking into account some of the ancillary shopping benefits on these cards.
What counts as a “grocery store?”
Unfortunately, it’s not always easy to determine whether a store will earn points as a grocery store or something else. How merchants are categorized depends on each individual card issuer. For example, data points on Doctor of Credit’s Payments Workshop indicate Discover and Chase do not categorize Walmart Neighborhood Market as grocery, but American Express, Citi, U.S. Bank, and CNB do. On the other hand, Meijer and Kroger appear to count as grocery across all cards.
Grocery delivery services, such as FreshDirect, PeaPod, Instacart, and Shipt, all count as grocery. However, if you use Amazon Prime Now to order grocery delivery from Whole Foods, that does not seem to work.
Before starting to manufacture spend at a grocery store, always check for recent data points or perform a small purchase to test how the store codes.
| Card | Annual Fee | Category Bonus | Estimated Value | Annual Limit |
|---|---|---|---|---|
| Amex EveryDay Preferred)* | $95 | 4.5x | 6.8% | $6,000 |
| American Express Gold Card | $295 | 4x | 6.0% | $25,000 |
| Blue Cash Preferred | $95 | 6% | 6% | $6,000 |
| Amex Blue Cash (old version)** | $0 | 5% | 5% | 50,000 |
| Amex EveryDay*** | $0 | 2.4x | 3.6% | $6,000 |
| BOA Americard Cash Rewards with Platinum Honors Preferred Rewards**** | $0 | 3.5% | 3.5% | $10,000 ($2.5k quarter) |
| US Bank FlexPerks Travel Rewards | $49 | 2X | 3.0% | No Limit |
| BOA Americard Cash Rewards with Platinum Preferred Rewards**** | $0 | 3% | 3% | $10,000 ($2.5k quarter) |
| Blue Cash Everyday | $0 | 3% | 3% | $6,000 |
| Hilton Honors Surpass Card from American Express | $95 | 6X | 3.00% | No Limit |
*Assumes 20 or more purchases in statement period to earn 20% bonus on points earned
**1% for first $6500 spend, then 5% capped at $50K spend per year. U.S. only
***Assumes 30 or more purchases per in statement period to earn 50% bonus on points earned
****Combined grocery, wholesale, and gas. 3.5% assumes Platinum Honors which requires $100,000 in Merrill Savings and Investment accounts, otherwise, you earn 3% with $50,000 or 2.5% with $20,000
Best Miles and Points Card for Grocery Spend
The Amex Gold card is undoubtedly the most popular and one of the best credit cards for groceries. The card offers 4x points on grocery, on up to $25,000 each year. Meaning, if you fully maximize the category bonus, you’d earn 100,000 points. Even better, it is possible to hold multiple Amex Gold cards at the same time, increasing your bonus spend capacity.
While the average household is certainly not going to spend $25,000 a year at a grocery store, the card is appealing to those who can manufacture spend. Although Amex has been cracking down on individuals that abuse their credits, signup bonuses, and referral system, there have yet to be any reports of individuals having trouble after manufacturing grocery spend with an Amex gold card.
Amex has a “once per lifetime” rule to be eligible for the signup bonus on their cards, but you can still get approved for a new card without earning the bonus. Additionally, regardless of whether you are eligible for a signup bonus, you can always utilize a refer-a-friend link to earn a friend or family member an additional 10,000- to 25,000-point bonus.
Alternatively, you could product change to a Gold card from the Amex personal Platinum or Green card.
Besides the gold card, several other Amex cards offer bonus points for spend at grocery stores. The Amex Everyday Preferred card ($95 annual fee) offers 3x Membership Reward Points on grocery spend on up to $6k in grocery spend each year. If you make more than 30 transactions per statement period using the card, any points earned during the period are increased by 50%. That means you can effectively earn 4.5 Membership Reward Points on grocery spend.
The Gold and Everyday Preferred card comes with a sizable signup bonus, making them both worth getting for at least one year.
Best Cash Back Card for Grocery Spend
The Blue Cash Preferred card is a good option if you’d rather stick to cash back. The card earns 6% back at U.S. grocery stores, up to $6,000 per year. It has a $95 annual fee but usually offers a signup bonus of around $300. Beyond the first year, if you are not maximizing the $6,000 annual limit, it may make sense to switch to the no-annual-fee Everyday Card.
The Amex Blue Cash Everyday card offers 3% back at grocery stores, with no cap. The breakeven point comes with $3,167 of grocery spend. Above that amount up to the $6k cap, the Blue Cash Preferred earns more, while below that amount, the Everyday card offers better value.
Assuming you have a significant amount of assets at Merrill Lynch, the no-annual-fee Bank of American Cash Rewards cards are also a great choice. The card earns 2% back on up to $2,500 in purchases each quarter, at grocery stores, gas stations, and wholesale clubs. However, if you have enough assets invested in a Merrill savings or investment account, you can earn a 25-75% bonus on all cash back earned.
- $20,000 – $49,999: 25% bonus = 2.5% back on groceries
- $50,000 – 99,999: 50% bonus = 3% back on groceries
- $100,000: 75% bonus = 3.5% back on groceries
Several regional credit unions and banks also offer cards with unlimited 3% back on groceries, including the Golden Platinum Rewards Visa, Bellco VISA Platinum Rewards, and UMB Simply Rewards VISA.
Rotating Category Bonuses
A few cards with rotating bonus categories may not be the best credit card to use at grocery stores year-round, but might be during a quarter when grocery stores are a bonus category.
- Chase Freedom: During the past four years, grocery stores have appeared in the bonus category list for the second quarter (April – June).
- Discover: Included grocery stores as a bonus category in 2018 Q2, 2019 Q1, and 2020 Q1.
- Citi Dividend: Included “supermarkets” as a bonus category in 2020 Q1, which was the first time in recent years the card offered a grocery category bonus.
Targeted Offers
While not predictable, some card issuers send out targeted offers for spend at grocery stores. For example, Citi recently sent out an offer to many Citi Prestige cardmembers offering 5x on up to $500 in grocery purchases through March 31st.
Store-branded cards
In addition to the cards above from the major banks, some store-branded cards also earn a bonus when shopping at a particular store.
Walmart
The Capital One Walmart card offers 5% back on purchases made at Walmart.com, the Walmart app, and Walmart grocery pickup and delivery. While the card normally only earns 2% on Walmart in-store purchases, during the first 12 months of card membership, you can earn 5% back by using the card in the Walmart Pay app. Cashback rewards can be redeemed for a statement credit, or used at Walmart.com checkout to cover purchases.
As will be discussed, the Walmart Rewards card’s other shopping benefits make it a great choice for large purchases.
Amazon Prime / Whole Foods
The Amazon Prime Rewards Visa Infinite card offers cardmembers 5% back at Whole Foods if they have a Prime membership or 3% without Prime.
Consider a card’s shopping benefits
Points per dollar is not necessarily the only benefit you need to consider when evaluating the best credit cards for groceries. If you are purchasing higher-priced items from a grocery store, such as electronics, you should also consider the shopping benefits offered by your card. Purchase protection, extended warranty, price protection, and return protection can easily be worth hundreds to thousands of dollars if utilized.
- Purchase protection will reimburse you if your item is damaged within a certain number of days, usually 90, following purchase.
- Return protection will allow you to send in your merchandise and get reimbursed if a store will not accept returns, usually within 90 days of purchase.
- Price protection will reimburse you the difference in price if you find an item at a lower price, usually within 60-120 days of purchase.
- Extended warranty will extend a manufacturer’s warranty, usually by a year.
Among those benefits, price protection is the one likely to be most applicable given how often grocery stores place certain items on sale. In recent years, many card issuers have removed price protection from their card. See my post on price protection for a list of cards that still offer the benefit.
Unfortunately, the Walmart card from Capital One is the only credit card with a grocery spend category bonus that also offers price protection.
Bottom Line
There certainly is not a single credit card with a grocery category bonus that can be recommended to everyone. Instead, the best cards for groceries will always depend on your situation, what stores you shop at, and whether you’re planning to make any large purchases at the store.
If you are into travel hacking through miles and points, the best card for manufacturing spend at grocery stores is clearly the Amex Gold Card. With the ability to earn up 4x points on up to $25,000 grocery spend each year, the Gold card can easily deliver a tremendous amount of value
Alternatively, the Blue Cash Preferred is a good choice if you do not plan to manufacture spend and are simply looking for a card to earn the most rewards for normal grocery spend. If you plan to spend less than $3,000 each year or just want a simple card without an annual fee, the Blue Cash Everyday card earns 3% back on groceries without any cap.
Photo by Nathália Rosa on Unsplash