The Best Grocery Credit Cards and Why it May Not Matter

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Update:   The American Express Blue Cash Preferred and Citi Thank You Preferred offers in this post have expired but check Hot Deals for the latest offers!

Grocery Category Bonuses

Readers often ask what the best cards are for grocery purchases.  So I made a table of my favorite cards which give a bonus for buying groceries.  Please comment if you know of a better card for groceries!

The Best Cards for Buying Groceries

I actually don’t go out of my way to use a specific card for groceries since I prefer to use my limited spending towards completing the minimum spending on new credit cards.

We also don’t spend enough on groceries to make it worth while, but some folks with large families or businesses may spend lots on groceries.

If you don’t spend a lot on groceries, you may be better off with a card with no annual fee (but with a grocery category bonus) which you can keep for a long time instead of paying an annual fee.

Also note that some grocery cards only give you the additional points for shopping at stand-alone supermarkets (like Kroger, Safeway, etc.), and NOT  for shopping at super-stores like Costco, Sam’s Club, Super Target, or Wal-Mart Super Centers.

So these cards may be useless if you shop for groceries at super-centers which usually have a lower price than stand-alone supermarkets.

Buying Gift Cards

That said, many grocery stores sell gift cards to other retailers such as Amazon, Best Buy etc.  And many grocery stores sell Visa or MasterCard gift cards.

You can now add a PIN to these gift cards and use them to load your Bluebird card at Wal-Mart and then pay your loans and bills which you otherwise couldn’t pay with a credit card.

So it could make sense to buy gift cards from grocery stores with a credit card which earns extra miles, points, or cash back at grocery stores.  The terms and conditions of some cards say that you won’t earn miles and points for gift card purchases, but in my experience the transaction is coded as being from the grocery store and you do earn miles and points.

Huge Selection of Gift Cards

Gift Cards in Grocery Stores

But I don’t recommend going overboard and buying lots of gift cards and maxing out our credit cards.

Here are MY favorite picks for buying groceries with a credit card.

1.   Blue Cash Preferred® Card from American Express

The Blue Cash Preferred® Card from American Express earns 6% cash back on supermarket spending & 3% cash back at gas stations.  There is a $6,000 limit per year (~$500 per month).

Note that you may get a better sign-up bonus ($250 vs. the usual $150) if you check your special offers via creditcards.com

  • Step 1:   Click on this link to see your exclusive offers from creditcards.com
  • Step 2:  Enter your name and address, but you can leave your social security number blank.
  • Step 3:  You will see offers including a 45,000 mile Delta offer.  The card application page took a few minutes to load for me.

If you don’t spend much on groceries you may be better off with the Blue Cash Preferred® Card from American Express or the Penfed Platinum Rewards card.  Both these offer 3% cash back for grocery shopping, but which have no annual fee, which means that you can keep them for a very long time and help build your credit score.

Update: Citi ThankYou Preferred no longer has groceries as a bonus category.

2.   Citi Thank You Preferred

I like the Citi Thank You Preferred because it has the highest category bonus (5 points per $1) on groceries (& drugstores & gas) and because it has no annual fee. 

Unfortunately, the 5X points are valid only for the 1st 12 months, so this isn’t a card to keep  for the long term.  But it could be useful in the short-term for those of you who have a lot of drugstore and grocery store purchases!

3.   American Express Premier Rewards Gold

I wouldn’t go out of my way to get this card with the current 25,000 point bonus. (offer expired) Instead, I’d wait for the 50,000 point offer to return.

If you already have the card, it could be worth the 2 Membership Rewards points per $1 on groceries.  But you’d have to spend a LOT on gas to justify the $175 annual fee, so I wouldn’t keep this beyond the first year.

That said, you do get 15,000 bonus points for spending $30,000 in 1 calendar year, so it could be worth it if you are a Big Spender.  Or if you spend heavily on air fare which earns 3X points or gas which earns 2X points, but not otherwise.

Bottom Line

It is tempting to chase after grocery category bonuses.

But I’d make sure to use a card which doesn’t have an annual fee (like the Blue Cash Everyday® Card from American Express or Penfed Platinum Rewards).

If you do pay an annual fee for a card like the American Express® Premier Rewards Gold Card which earns a bonus for gas, do the math to see that paying an annual fee (after the sometimes free first year) makes sense for you.

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55 responses to “The Best Grocery Credit Cards and Why it May Not Matter

  1. Agree with your conclusions. Grocery bonuses seem tempting, but most people don’t put that much actual spend on them (if they do spend a lot on groceries, they likely shop at Costco/WM/Target etc – all non-bonus stores). If you do switch spend to stand-alone grocery stores, you are probably paying more in groceries upfront than the “savings” you get on the back end from the cards.

    PRG at 2x has to be weighed against that $175 AF. Irrespective of that high AF, do you really make anything using a 2x card if you are paying a lot more for your groceries than if you shopped at Costco/WM? Highly unlikely. Even if you were able to redeem those points for high value redemptions, you’d be lucky to break even – and then you’d have to deal with limited award availability/black outs. For most, easier/cheaper to save the money by shopping at WM/Costco and then use cash to travel.

    You could buy some gift cards, but many grocery stores don’t sell them using CCs.

  2. Thanks for the breakdown. I do not have any citi cards, so I am not familiar with their rewards. What is the value of Citi Thank You Preferred points? Is it like the Hilton ones or more like the Chase Ink (transfer to United, etc.) or US Bank (20k points for domestic flight)?

  3. 1) Does Citi Thank You Preferred give 5X Points on Groceries in BJ’s & Walmart?
    2) Is it possible to find a list of participating stores?

  4. You might want to update your chart on the BankAmerica card — the limit is $1500 per quarter, not month. And there is an additional 1% back on everything else, and a 10% bonus for customers who redeem their bonus cash into a linked BoA account. Note that there is also a similar BA Privileges with Cash Rewards card which has a $75 annual fee, waived with a certain minimum balance in related accounts, that gives a 50% bonus if rewards are redeemed into a linked account — making the return on groceries 3%, on gas 4.5% and 1.5% on everything else. They have also started a shopping portal which gives cash back at certain online shopping, directly to your card or bank account.

  5. barclays travelocity amex card get 2pts in select category(grocery is one you can choose). The 20000 pts can be redeemed for a 400 credit on travelocity travel. This is essentially 4% back on groceries without the limits of the other card you mentioned.

    Long term it is better than any of the ones you mentioned for manufactured spend at a grocery store.

    https://www.barclaycardus.com/apply/Landing.action?campaignId=1371&cellNumber=13

    • @Paul – In Kansas many grocery shops sell gift cards with a credit card, but it may not be that easy in other parts of the country.

      @AP – It is ~1 cent in redemption for travel or gift cards. You can get 1.33 cents per point if you have the Citi Thank You Premier and redeem for air travel booked via the Citi Thank You Portal.

      @KQ – The only way to find out is to do small tests for yourself to see how it is coded.

      @HR – Thanks! I updated the chart and added the other BOA card!

  6. @HR, and what are the terms for making the linked account free? I don’t think having an account with them is worth it unless one uses the BoA as a main account or possible to redeem into a free savings/checking accounts. BCP = 4.75% with AF on groceries, Barclay Sallie Mae 5% upto $250 on gas, PenFed 5% at a pump on gas, Capital One gives straight 1.5%. Fidelity AMEX/Priceline = anytime 2%.

  7. If you travel and/or shop internationally with Chase Ink Bold/+ (that’s what I have and living abroad), you will get the UR bonus points associated with certain categories, eg. office supply stores and on cellular phone, landline, Internet and cable TV services (5x/$), gas stations and hotel accommodations (2x/$) and etc. I think that applies for AMEX MR as well. Just need to know which card has no foreign transaction fees.

  8. The Target Redcard gives you 5% cash back on all your Target/Super Target purchases. Super Target is where we buy most of our groceries. Although Target seems to give you a very low credit limit compared to banks so if gift cards are your thing you are likely better off with another card.

  9. Speaking of Barclay – there is also the Sallie Mae World Mastercard which everyone seems to forget about. It is not quite as good as before they switched it over, but has 5x points on Groceries/Gas/Bookstores (read: Amazon) up to the limits of $250/$250/$750 per month. This card works out pretty well for us since the limits are close to inline with our spending. Sometimes we go over on groceries, but then I will switch to Freedom or a card that I need a minimum spend on.

  10. We spend $1000/month on groceries. I put my spending on the Amex hilton for 6x now, and 5x starting in May. At least I can collect 60k hilton points a year. We don’t look to spending it in fancy hotels. 1/3 of my spending goes to Costco so for that I go to my local grocery store that sells amex gift cards and buy them with my amex hilton. The hilton points are the only hotel points i can collect more easily. Everything else seems lo require credit card sign up. and hilton has a ton of affiliated credit cards and we can always boost up our account when we need to.

  11. Ok peep’s I’m fairly new to this game, however, I was able to see a great benefit from buying gift cards at grocery stores the photo that Darius posted is from Kroger’s/fry’s. I think people need to stop thinking in terms of JUST airline or hotel points, but in the bigger scheme of things. In the photo that showing the gift cards in the middle top there is a sign that says, 4x fuel points. Kroger’s/fry’s (has gas stations too) has this promo a couple of times a year (normally it is 2x). IF you buy gift cards you can get 4x fuel points. Basically for all other purchases it is 1 dollar spend you earn 1 point towards fuel. 100 points = .10 off gas up to $1.00 off 1200 points is $1.00. Getting these points are very easy, it is a little bit of work, but we are used to this. Now you can buy VISA and MC gift cards but they will not net you fuel points (yeah I know damn them). However, they do sell Home Depot (HD) and Lowes gift cards and yes you can use your CC to buy these. Take your HD or Lowes CG to these stores and buy VISA and MC CG. It is an extra step but to get a dollar off for gas for me is huge, and the extra driving isn’t out of the way since my drive from home Kroger’s/Fry’s, there is a HD and Lowes on my way home. I love being able to fill my car with $2.55/gallon gas, and earn FF miles at the same time. I know that Safeway has gas stations and they too have the fuel points and at least here in Phoenix, they have the 4x fuel point’s promotion too. So now when I fill up I’m saving $17 a fill up.

  12. Interesting analysis. We have the AMEX PRG and spend almost exactly $30K per year to unlock the 15,000 bonus points.
    But ALL of our spend is either groceries(Kroger) and/or airfare. As such, the 30,000 spend turns into at least 60,000 points(more with airfare at 3X, of course). Add the 15,000 bonus and we net about 75,000 MR’s.
    In my opinion, the $175, while still too high, is justified….barely…..

  13. @PS: Thanks for mentioning that card, always nice to have options, especially when it’s a transunion-puller.

  14. Is there a list of what qualifies as a stand alone supermarket? Such as Meijer.

  15. This is why I love mms. You are upfront about which cards earn you money and which don’t. You don’t push these cards like your competitors do; instead you tell us that going after the grocery bonus is not worth it. thx!

  16. Interesting post. I generally agree. There is not really much cash/points whatever to be made above a non-fee 2% card that would make this worth it for me. I look at the 6% amex as a good example. 4% extra per dollar on $6000 minus the annual fee is $165…. would be way better off signing up for an additional 50k card.

  17. When you say you don’t spend much on groceries, how much are we talking about? Just for myself I spend about $350 a month on groceries. So yeah in grand scheme I probably won’t get a special groceries card unless it has no fee.

  18. Don’t forget Wells Fargo has 2 cards, one is a 3% cash back including grocery (and drugstore 🙂 and they have a 3x rewards one as well that covers grocery. Cashback is unlimited for first 6 months.

  19. John…the FlexPerks will give you up to 4% if you use it at Grocery Stores.

  20. TD also has 2 cards that offer 5x on Grocery

  21. I am fortunate to meet new card spends through small business expenses, so I aim to get a cash discount whenever possible on personal expenses. My wife uses the Target Red (5%) and we have the Amex Blue Cash Preferred (6% Groceries, 3% Gas). This covers the vast majority of our spending. The grocery bills increase quite a bit with a kiddo. I’m just looking for a card with a consistent 3-5% cash back (or even points) on restaurants – our other big personal expenditure. There are some quarterly rotating cards but I’d much rather have a go-to solution.

  22. Also, the Amex Blue Cash Preferred is only $75 annually.

  23. Darius….please tell me what I’m missing. I haven’t really paid attention to the Citi Preferred Card as I had one in the past. But now they are offering 5% rewards for 1 year with no annual fee. So, if I buy 10 VR a month for $5,000 spend x 12 months, that gives me 300,000 points which has a minimu value of $3,000 less the $240 for the 60 VR giving a net profit of $2,760. Am I missing something or is this a great deal? I don’t see this card being promoted at all. Thanks.

  24. It is the Hilton Surpass cc that gives 5x at grocery stores, not the no fee one linked in your chart.

  25. Can you set up the Target Red Debit Card to draw from a Bluebird account?

  26. Does Citi consider vanilla reload purchases as cash advances on the Citi Thank You Preferred card?

  27. @Greg the value stretches further if you have the Thank you premier

  28. Does anyone know if or what the repercussions are for over use of Vanilla Reload/Bluebird?

    If I was to use the bluebird card to perform the same transaction monthly, ie. Loading with vanilla reloads and paying bills to the same person/place monthly, what are the worst case scenarios? I have been doing so for the last 3-4 months, just want to know if I will be able to continue doing this without any problems. Thank You

    • @Pedro – The AMEX Premier Rewards Gold has a 2.7% foreign transaction fee, but the terms indicated that only US based gas stations and supermarkets earn the bonus points, though I haven’t tried testing outside the US.

      @Andrew @PS – Very interesting. Thanks for sharing!

      @Tony
      – I’m pretty sure that I’ve got fuel points for buying Visa and MC gift cards at Dillon’s

      @Melissa DeLuka – There isn’t and you’d actually have to do a test transaction to see if it qualifies for the bonus or not.

      @Jeremy – About $400 a month for the two of us.

      @dave – The TD and Wells Fargo cards are good, but I don’t like the 6 month limit.

      @Greg – You got it! I’ll be writing on it soon. As asar points out, you will get 1.33 cents if you redeem for air fare if you have the Citi Thank You Premier.

      @Richard1148
      – From May 1,2013 the no fee version will earn 5X points at grocery shops.

      @Guy – Not if you buy them in a store. I wouldn’t worry as long as you are paying legitimate bills with your Bluebird. If you max out your credit card, the banks could cancel the card or slash your credit limits on other cards.

  29. When does the AMEX BCP card start the $6,000/ year limit for people who applied for the card last year? I know for applicants from around the start of 2013, the annual limit camwithher card. But for those who uphold held the card for longer, does the limit kick in during the anniversary month’s statement?

  30. Hi MMS, I am kind of new here and I want to ask a question. what do you mean by “max out the credit”? If I use PRG to purchase visa gift card every week, say $500, load to Bluebird, and then pay my mortgage every month, and in a calendar year I would have made $24k purchase in PRG? With some more purchases, I can reach $30k to get the bonus 15000 points, do you think this is a case of maxing out the credit? Thank you very much.

  31. @Mellisa, AMEX considers Meijer as a grocery store.

  32. I forgot, you don’t want to use Meijer for churning since I only saw max of $100 VISA or MC GC (at least Meijers around here. Might be different at your location).

  33. @ new – “maxing out” D is referring to is in relation to your monthly spend vs your credit line, not the amount of annual spend you put on the card. Most suggest you stay at 30% or below of your CL or you begin to get dinged on your credit score. So if you have a $3K CL, only spend $1K. If you exceed that $1K, you can make an interim payment to bring the CL down below that 30% level before the monthly statement end date.

  34. Is there a limit on how much one can earn with 5x at drugstores on the Citi Preferred? Seems to me that I can head to CVS and make 25k thank you points/month for the next year on a no fee card. Seems too good to be true and why not more hype around this?

  35. There is a $250 sign up for AMEX Blue Cash via CardMatch, which is better than the $150 affiliate offer.

  36. I may be blind, but I don’t see anymore bonuses for grocery for Hilton AMEX card:

    http://www304.americanexpress.com/getthecard/learn-about/Hilton-HHonors

    3 pts for all purchases, 6 pts for Hilton expenses.

  37. @Sergey I don’t see it either. Just 3 points for any not-in-a-Hilton purchase. Are current card holders grandfathered in on the grocery and gas bonus?

    Worse, I do see this, if you scroll over the info icon:

    “Eligible purchases do NOT include… purchases or reloading of prepaid cards…”

    The word up to now is that a CVS purchase of a VR card was coded as just a plain purchase, so that fine print doesn’t in fact apply. But since we do know AMEX is changing the bonus points awarded after the May closing date, perhaps they are changing this as well? 🙁

  38. Darius at the Fry’s/Krogers here in Phoenix, there are small signs around the VISA/MC and Fry;s GC stating that these cards will not generate 2x or 4x bonus points. However, now that you can buy VISA GC’s and get a PIN, I’ll try these and see what kind of bonus points it does generate. Since Fry’s does not bat an eye when using a CC.

  39. Don’t forget the Target Red Card, which gives you 5% back at Target including when you shop for groceries. Get the Debit card version and ditch the credit inquiry.

  40. We spend about $1500 a month on grocery shopping. So, it looks like the Hilton card would be the best? Although, we tend to marriotts and hyatts. Can Hilton pts be transferred to another program?

    • @Ed – Unfortunately it is limited to only the 1st year, but still a good card…

      @romsdeals
      – I mention that in the post!

      @Sergey @Robert Hanson – It doesn’t make sense to grandfather old users and not extent it to new users. My statement said that the categories are changing, so I assumed they apply for everyone. Perhaps we’ll know more in May when then changes go in effect. It is hard to determine what you purchased in a shop, so I don’t suspect that will change soon (even though they’d like it to!)

      @Tony – I’m curious what your experience is since I do get the points at Dillon’s

      @DJ
      – Thanks!

      @karen – You can’t transfer Hilton points elsewhere. The best card really depends on what you want to use the points for.

  41. “It is hard to determine what you purchased in a shop”
    My CVS will only sell me two VRCs at a time. So the other day I had two charges for $1,000 each, plus service fee, one right after the other. Somehow I think AMEX can figure out why I bought without too much trouble. 😀

  42. Good breakdown. Some worthwhile comments:

    The distinction between “stand alone” supermarkets and a Walmart SC matters for Amex but not for Visa. Visa’s merchant code for Walmart Super Centers identifies such stores as supermarkets/grocery stores. I have no experience with “Super Targets”. Perhaps others might know. So, any Visa card with grocery bonus will work at Walmart Super Centers. That’s a bonus on much more than just groceries. The electronics register may be coded differently. I don’t know. But the main registers are fine for sure. I use the PenFed Platinum rewards at WM SC’s for, well, everything I buy there.

    Secondly, I couldn’t help but roll my eyes a little at the projecting of shopping habits onto others. Groceries are a HUGE expense for families. HUGE. It’s like a mortgage. The young urban couples who eat out a lot and don’t see a grocery store as very important (been there, done that) should not see themselves as the norm nor advise as if they were. A strong grocery bonus rewards card is one of the most important cards a traveler with a family can have. Such a traveler may find cards with travel bonuses on airlines and car rentals less useful as they save up points on every day non travel spending for that otherwise pricey family vacation.

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  44. I recently signed up for the no annual fee Am. Express blue Everyday card, received it in the mail and I’m excited to start using it. I’m a little confused though because there is no mention of the $100 bonus for $1,000 spent in first 3 months. I went back to look at the offer and it does say if you have an American Express card you may be excluded from this deal. I technically do have an American Express card, one I have NEVER actually used, signed up for several years ago, no idea why, and never canceled it. I don’t think it is even a rewards card! Could that card be the reason why I’m not getting the bonus here? Or could I still earn the bonus and they just didn’t mention it in the welcome letter hoping I forget and then don’t spend the $1,000 in the first 3 months? I am still going to keep and use this card, plan to use mainly for groceries. Just a little disappointed about possibly losing that $100 bonus.

  45. I wanted to apply for Blue Cash Preferred. I was checking couple of days and there was $250 cash back after the initial purchase. I am not finding the same offer now. Can you please send me the direct link for that offer?
    Thanks.

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  47. AMEX has dropped 2x points on grocery stores a few months ago when they added computer hardware stores. From their website:

    2X points on US purchases for advertising in select media, shipping and at gas stations
    2X points on US purchases made directly from select computer hardware, software and cloud computing providers

  48. I can verify that I’m still getting 2x on grocery stores with the PRG. The card now has lots of targeted offers for users to get statement credits. The best is a $5 credit every time you spend $25 at a BP gas station through 12/31. And these credits apply to all the authorized users as well. My wife and I have already gotten $55 in statement credits in the last 3 weeks. So I’m hoping that if this continues throughout next year that the credits will offset the $175 annual fee. If so, then this card is great.

  49. The old amex blue card which is still available is worth a mention as well.