[Disclosure: Emily and I get a referral for the links to the Blue Cash Preferred® Card from American Express, Blue Cash Everyday® Card from American Express, American Express® Premier Rewards Gold Card & the US Bank Flex Perks card as of the post publication day. You don't have to use our links, but we appreciate it when you do!]
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!
|Citi Thank You Preferred||5X Points on Groceries Only For FIRST 12 Months||None||5X Points on Drugstores & Gas Stations Only For FIRST 12 Months|
|Blue Cash Preferred® Card from American Express||6% Cash Back (Up To $6,000 in spending per year) at US Supermarkets||$75||3% Cash Back at US Gas Stations|
|Blue Cash Everyday® Card from American Express||3% Cash Back (Up To $6,000 in spending per year) at US Supermarkets||None||2% Cash Back on Gas & Select Department Stores Within the US|
|American Express® Premier Rewards Gold Card||2X Points at US Gas Stations and US Supermarkets||$175 (waived for the first year)||3x Points on Airfare & 2X Points at US Gas Stations|
|PenFed Platinum Rewards||3 Points on Groceries||None||5 Points on Gas|
|American Express Hilton||5 Points at US Supermarkets||None||7 Points at Hilton, 5 Points at Restaurants & Gas Stations|
|US Bank Flex Perks Travel Rewards||2X Points on Highest Spending on Gas, Groceries, or Air Travel||$49 (waived for the 1st year)||3X Points for Charitable Donations|
|Barclays Sallie Mae||5% Cash Back on 1st $250 per month in Groceries||None||5% Cash Back on 1st $250 per month in Gas & $750 on 1st $750 on books|
|Barclays Travelocity||2 points for each $1 spent on any category you choose - gas, groceries or restaurant||$39||5 Points for each $1 at Travelocity|
|BankAmericard Privileges||3% on groceries - 2% cash back on groceries + 1% extra cash back if you redeem cash back into your Bank of America account.||$75 (waived for the 1st year or with $50K in bank balance)||4.5% on gas - 3% cash back on gas+ 1.5% extra cash back if you redeem cash back into your Bank of America account.|
|BankAmericard Cash Rewards||2% on Groceries & 3% on Gas (up to $1,500 Combined Limit per Quarter)||None||3% Cash Back on Gas & 2% on Groceries (up to $1,500 Combined Limit per Quarter)|
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.
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.
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.
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.
It is tempting to chase after grocery category bonuses.
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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