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Grocery prices have increased significantly in recent years, costing shoppers nearly 30% more than they did at the beginning of 2020. That’s driven many people to search for extra ways to save money on their monthly shopping list.

One way to lower your food bill is to take advantage of grocery rewards programs. There are many types of programs to choose from. Some can even be used together to maximize savings.

What Are Grocery Rewards?

Grocery rewards are a way for shoppers to save money through a variety of offers, such as coupons, cash back, and freebies. You can enroll in programs with specific stores in order to get discounts and other types of rewards. You can also use third-party programs, like discount apps and credit cards, to qualify for additional savings such as cash back.

Recommended: Price of Eating at Home vs. Eating Out

How Does Grocery Rewards Work?

Most grocery rewards programs offer discounts and other perks in exchange for your personal information. They track your purchases to gain insights on consumer habits and trends while also enticing you to return to the store for more savings. In-store programs may have you enter your phone number or swipe a membership card to identify you at checkout.

Many store programs are free, but some chains also have a paid membership upgrade. These programs usually come with bigger perks, so you’ll need to make sure the bonus deals justify the cost to sign up.

Third-party apps can be structured differently, often requiring you to upload photos of your receipts before you can access any available perks. Credit card rewards programs may also offer cash back on groceries when you make purchases with the card. Be aware that if you don’t pay off your balance each month, you’ll pay interest on the outstanding purchases.

Recommended: Grocery Budget Table

Benefits of Grocery Rewards

The biggest benefit of using a grocery rewards program is to save money on groceries. Here are common features you may see with different offerings.

•   Welcome rewards: This is usually a one-time offer when you sign up for a program for the first time. That gives you a perk as a new member, often as a cash discount on your first purchase using the rewards program.

•   Free or discounted products: Rewards members may receive rotating offers for free or discounted products from the store.

•   Exclusive coupons: You may get access to coupon offers that aren’t available without a rewards membership.

•   Delivery perks: Some rewards programs offer free or discounted Instacart services (typically with a paid membership upgrade).

•   Streaming services: You may also receive offers for complimentary streaming services (usually available in paid rewards programs).

•   Cash back: Apps, credit card grocery rewards, and other programs may give you cash back based on your spending. Then you can transfer the funds to your checking account or apply credit card cash back to your next statement.

•   Birthday perks: Some grocery rewards give you a gift during your birthday month, like an extra discount or free product.

Recommended: Grocery Budget for 3

Ways to Earn Grocery Rewards

Which grocery rewards should you use? Check out the commonest types of programs to see which ones fit your lifestyle and shopping habits.

Customer loyalty programs: Grocery stores create loyalty rewards programs to offer discounts in exchange for tracking your grocery purchasing habits alongside some personally identifying information. You may be able to access deals using your phone number, an app, or a membership ID card.

Paid membership programs: Some stores offer an upgraded customer rewards program with a monthly fee. These come with bigger benefits, such as free delivery services, fuel discounts, or member-exclusive deals.

Third party cash back apps: Grocery cash back apps provide perks like coupons, cash back, and gift cards when you create an account and upload your receipts into the app. An alternative option is to allow a browser extension that tracks your online purchases in exchange for deals and cash back rewards.

Credit card grocery rewards: Some credit cards let you earn cash back or points with each purchase. Your earnings accumulate as a percentage of your spending. If your credit card has bonus categories, you could also earn extra on grocery purchases throughout the year. Check what date cycles apply for grocery bonus rewards in order to max out your earnings. Just make sure you pay off your balance so you don’t accrue unnecessary interest.

Recommended: Grocery Budget for 5

Grocery Rewards Tips

How do you maximize grocery store rewards programs? Follow these tips to make the most of your savings when grocery shopping on a budget.

Stack deals: There are many different types of grocery rewards programs, but the good news is that you can often stack perks for each one. For instance, you can sign up for a store rewards program, pay with a grocery rewards credit card, and then submit your receipt into a cash back app for triple savings opportunities.

Check for program limits: Some types of grocery rewards may come with limitations. For instance, you may only be able to earn up to a certain dollar amount with cash back programs. If you accumulate fuel discounts, there may be a cap on the lowest price allowed. Scrutinize the terms when you sign up so you’re not disappointed by any limits.

Look at credit card rewards categories: If your credit card has a special cash back or points rate for grocery stores, find out what stores actually fall under that category. Wholesale clubs or general stores like Target and Walmart may not count.

Recommended: Average Monthly Expenses for One Person

The Takeaway

Groceries may be more expensive than they were a few years ago, but that doesn’t mean you have to blow your budget every month. Explore all of the available rewards programs for a low-effort way to keep prices low and access personalized discounts and cash back.

FAQ

What is the 6-to-1 grocery rule?

The 6-to-1 grocery rule is a simple grocery budget method for one person. It breaks down your shopping categories into six easy-to-remember categories:

•   6 vegetables

•   5 fruits

•   4 protein sources

•   3 starches

•   2 sauces or spreads

•   1 fun item

Is $300 a month good for groceries?

If you’re wondering how much to spend on food, $300 a month per person is considered relatively thrifty. The USDA generally recommends budgeting around $250 to $320 per month for an adult, depending on age and sex.

What is a realistic monthly grocery budget?

A realistic monthly grocery budget depends on the size of your family and the ages of everyone in your household. A family of four on the USDA’s Thrifty Food Plan could expect to spend around $1,000 each month. But you may need more or less depending on factors like your location and dietary restrictions.

What is the cheapest food to live off of?

There are many cheap and nutritious foods to choose from when grocery shopping on a budget. A dozen eggs, beans, rice, potatoes, oatmeal, and pasta are filling staples to include on your shopping list each week while also utilizing a grocery rewards program.

What is the 5-4-3-2-1 rule for groceries?

The 5-4-3-2-1 rule for groceries is a popular budgeting strategy that helps you choose nutritious foods at an affordable price point. Different sources may show different breakdowns of each category, but here is a common interpretation: 5 vegetables, 4 proteins, 3 fruits, 2 carbohydrates, and 1 treat.

How much should I spend on groceries?

Choose how much to spend on groceries after accounting for your non-negotiable expenses in your monthly budget. Then you can see how much money you have left for other costs, like groceries, entertaining, and saving for long-term goals. Adjust each category until you find a grocery budget that works for you while also leaving enough for other spending.

How much do groceries cost per month?

For an individual, groceries on average cost between $250 and $320 per month for someone on a thrifty budget. For a family of four, the average cost is just over $1,000.

What is the 50-30-20 rule for groceries?

The 50-30-20 rule is for your overall budget, not groceries. This strategy allocates 50% of your income to needs, 30% towards wants, and 20% towards savings. Groceries fall under the needs category, although you have room to adjust how much you spend each month.

Photo credit: iStock/Ivan Pantic

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

SoFi Invest®

SOMB-Q425-016

A grocery rewards credit card is a strategic way to save money every time you shop at the supermarket. Each shopping trip helps you earn rewards you can apply to future purchases.

Even when you factor in rising grocery prices, the cost of eating at home is still cheaper than eating out. Using a grocery rewards credit card helps you manage every part of your budget while controlling food costs.

What Are Grocery Rewards?

Grocery rewards are programs that help you save money on your store purchases in a variety of ways. Grocery rewards credit cards let you earn cash back or points whenever you use the card to purchase groceries.

Other types of grocery rewards, such as store loyalty programs or cash back apps, track your spending data in exchange for perks like discounts and free products. Whether you’re creating a grocery budget for five people or a food budget for three people, you can lower your overall spending by using a combination of grocery rewards programs.

Recommended: Grocery Budget for 1

How Do Grocery Rewards Credit Cards Work?

A grocery rewards credit card comes with several perks for the cardholder. In order to get this type of credit card, you need to submit an application and get approved by the issuer. The approval process is based on your credit history and your income. Having a strong credit score with plenty of on-time payments and low debt balances can improve your chances of getting approved. Plus, you’ll qualify for better interest rates when you carry a balance.

Every time you make an eligible purchase with your grocery rewards credit card, you may accrue points, miles, or cash back — depending on your card’s specific program. Once you’ve accrued your rewards, you can redeem them.

For cash back cards, you can typically choose between receiving a check, direct deposit, or a statement credit on your card account. Miles and points can be redeemed for eligible purchases. While you may not directly save money on groceries (unless you use your cash back rewards at the supermarket), you may be able to lower your average monthly expenses by using a grocery rewards credit card.

Types of Grocery Rewards Credit Card

You can earn grocery rewards in a few different ways when using a credit card. Some cards offer a flat rate of points or cash back on all purchases, including groceries. Others have bonus spending categories. You could find one that offers a higher rewards rate for groceries year-round. Or you could find a credit card with rotating rewards categories. In this situation, grocery stores usually earn a higher rate during one quarter every year.

Benefits of Grocery Rewards Credit Card

Here are some of the top perks of using a grocery rewards credit card.

Sign-up bonuses: Some card issuers offer a sign-up cash bonus when you qualify for a new credit card. Typically, you need to meet minimum purchase requirements within a certain time frame in order to receive the bonus, which is eventually credited to your account.

General rewards: A grocery rewards credit card often lets you earn points or cash back in several different spending categories. So not only can you shop for groceries on a budget, you can also accumulate rewards in other spending areas.

Credit improvement: Responsibly using a grocery rewards credit card may help improve your credit score. That, in turn, can lead to more favorable financing terms and interest rates in the future. For starters, build your credit history by making at least a minimum payment on time every month. By paying off your balance in full each month, you’ll give yourself a larger overall credit limit, which will lower your credit utilization ratio — and could raise your score.

Examples of Grocery Credit Card Spend Scenarios

Let’s take a look at a few different scenarios to see how much you could earn with a grocery rewards credit card.

We’ll also use spending plans from different types of households using data from the Grocery Budget Calculator Table, then calculate their annual food costs based on a moderate budget.

Recommended: How Much Should I Spend On Food?

Alternatives to Grocery Rewards Credit Cards

Looking for more ways to save on your grocery bill? Here are some credit card alternatives (and additions) to consider.

•   Customer loyalty programs: Join loyalty rewards programs at grocery stores you frequent.

•   Paid grocery memberships: Consider upgraded membership programs from certain grocery stores. The benefits are usually more substantial and make sense if they pay for themselves.

•   Third party cash back apps: Download cash back apps and upload your grocery receipts to get extra cash back and discounts.

Grocery Rewards Tips

Follow these tips to maximize your credit card grocery rewards.

Buy gift cards at the grocery store: If you ever give gift cards as presents, buy them at a grocery store using your rewards card. It’s a great way to boost your grocery earnings on something you may normally buy elsewhere.

Check store eligibility: Even if you’re buying grocery items at a gas station or convenience store, your card issuer may not count the transaction as a grocery store purchase. Find out what qualifies in the category in order to use the right credit card for your rewards.

Use a delivery service: Some credit cards categorize delivery services as a grocery store. You may be able to order from stores that aren’t normally included in the grocery category.

Understand annual caps: Many rewards cards have a quarterly or annual cap on how much you can earn in specific spending categories.

The Takeaway

Using a grocery rewards credit card can be a smart way to save on your groceries and enjoy perks throughout the year.

FAQ

What are the advantages of using a grocery rewards credit card?

A grocery rewards credit card lets you earn cash back or points on everyday purchases you’d likely be making anyway. You can redeem your cash back or use points for things like travel perks, gift cards, and more. As long as you pay your balance in full each month, you can take advantage of the rewards without accruing interest on your balance.

What is the difference between a grocery rewards credit card and a grocery store card?

A grocery rewards credit card lets you charge your groceries and other transactions onto a credit card account while earning points or a cash back percentage on eligible purchases. A grocery store card, on the other hand, is a loyalty rewards program for specific grocery stores. Loyalty members get access to perks like discounts, freebies, and coupons.

What is the 5-4-3-2-1 rule for groceries?

The 5-4-3-2-1 rule for groceries is a way to budget that sets limits on purchases in certain categories. A common interpretation of the rule allows for 5 vegetables, 4 proteins, 3 fruits, 2 grains or other carbs, and 1 treat item.

How much should I spend on groceries?

The amount you spend on groceries is a personal decision. It largely depends on how expensive an area you live in and how many people are in your household. If you’re trying to cut back on your overall expenses each month, spending less on groceries can be a good place to start.

How much do groceries cost per month?

According to the USDA, a family of four on a thrifty grocery plan spends about $1,000 per month.

What is the 50-30-20 rule for groceries?

The 50-30-20 rule doesn’t apply to groceries; it’s an overall budgeting strategy. It breaks down your monthly income into three categories:

•   Needs: 50% of income

•   Wants: 30% of income

•   Savings: 20% of income

So if you earn $7,500 per month, you would spend $3,750 on necessities, $2,250 on wants, and $1,500 on your savings goals.

Photo credit: iStock/Drazen Zigic

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

SoFi Invest®

SOMB-Q425-014

Many grocery stores offer their customers loyalty programs with rewards such as discounts, cash back, points, or free items for purchasing groceries they already need. Details vary from store to store, but these programs can offer big benefits to customers and stores alike.

Everyone is aware that food prices have gone up in recent years, with the Bureau of Labor Statistics reporting an increase of 2.9% from May 2024 to May 2025. Every bit of savings can help. Understanding how these grocery store reward programs work can help you make informed choices before you head for the check out.

What Are Grocery Store Rewards?

Grocery store rewards are useful for grocery shoppers on a budget. They are targeted benefits that shoppers receive for participating in a loyalty program. In return shoppers typically provide access to data on their purchasing habits, which can be invaluable information for stores.

How Does a Grocery Store Rewards Program Work?

Grocery store rewards programs usually require you to sign up for a card or app by providing personal information, such as your name, phone number, and email address.

To earn and redeem rewards, shoppers are asked to present their card or app when they check out to buy grocery items like eggs or household products, like sponges or dish soap.

Grocery store reward programs offer benefits in both directions. Stores like to use them because they encourage loyalty and repeat visits. They also use these programs to gather data on what their customers are buying, which helps shape marketing campaigns and inventory decisions.

Types of Grocery Store Rewards

Some reward programs offer entertainment benefits. Grocery store rewards programs try to offer shoppers the chance to earn a number of different benefits linked to food shopping, such as:

•   Points: Shoppers may receive points that they can redeem for money off in-store purchases. Some stores may offer points that can be redeemed for discounts on gas at partnering gas stations.

•   Discounts: Rewards program members may have access to coupons through a store’s app, for example.

•   Members pricing: Certain products may be priced lower for rewards members.

•   Cash rewards: Cashback rewards give you a certain percentage of your money back as a rebate when you make purchases.

Benefits of Grocery Store Rewards

The biggest—and perhaps most obvious—benefit of a grocery store rewards programs is savings. Rewards can help you lower your grocery bill or provide points for discounts with other retailers, such as gas stations or pharmacies. Savings are quick and easy, usually applied at the point of checkout.

Other less obvious benefits are connected to the data grocery stores collect on your purchases. This information may allow them to target special offers to you based on your purchasing patterns. This way you receive offers for items that you already buy rather than a collection of random promotions.

Rewards apps often offer purchase histories and savings summaries that allow you to track your spending as well as how much you typically spend on deals. This information can be helpful as you build your monthly budget.

Finally, because grocery store rewards help incentivize you to shop at the store, they can also incentivize eating at home versus eating out regularly. This can be a boon to budget-conscious shoppers, since the cost of eating at home hovers around $4 to $6 per person on average, while dining out can be $15 or more per person.

Recommended: What Are the Average Monthly Expenses for One Person?

Examples of Grocery Store Rewards Program

There are many different rewards programs from major retailers. Some are relatively elaborate. For instance, Kroger, a major grocery store chain, offers a free card with personalized deals, digital coupons, and points that can be redeemed for gas. The retailer offers a paid tier membership which doubles fuel points, offers free grocery delivery, and several free streaming services.

Other rewards programs may be simpler. Publix, for instance, offers digital coupons and notifications for buy-one-get-one sales.

Ways to Earn Grocery Store Rewards

Usually, all you have to do to earn grocery store rewards is sign up for the program and redeem benefits at checkout.

Some retailers offer a paid membership that can unlock further rewards, such as free delivery on purchase over a certain amount, free shipping for online purchases, no-rush returns, or access to a selection of free gifts or exclusive discounts.

Alternatives to Grocery Store Rewards Program

Not all grocery rewards programs operate as in-house benefits. For example, certain bank cards may offer cashback on grocery story purchase.

Other cards may offer different types of rewards for spending, such as points that can be redeemed for airline tickets or hotel rooms. Some cards may offer higher rewards for spending at grocery stores, while others may not differentiate them from other retailers.

Grocery Store Rewards Tips

To maximize rewards programs use tips that can help you save money on groceries. For instance, make use of coupons and shop sales for items that you already need. If you are using a rewards credit card, pay your bill in full each month. This way you will avoid carrying a balance, which triggers interest payments that could erase the cost savings you gained at the store.

Recommended: Average Grocery Budget for Family of 3

The Takeaway

Whether you’re looking to stretch your budget or pick up extra savings to use toward other financial goals, understanding rewards programs can help you make informed decisions and which programs to sign up for. Ultimately the goal is to maximize your benefits to ensure that you are getting real value from these programs.

FAQ

What are advantages of using a grocery store rewards program?

Grocery store rewards programs can help you save money, allowing you to stretch a grocery budget or secure savings for other financial goals. They can also provide more targeted offers for items that you already buy.

What is the 6-to-1 grocery rule?

The 6-to-1 grocery rule was designed by chef Will Coleman and suggests that when grocery shopping, shoppers buy six vegetables, five fruits, four proteins, three starches, two sauces, and one fun item. According to Coleman, this should provide shoppers with cost-effective, versatile ingredients that can be used for a week’s worth of meals.

Is $300 a month good for groceries?

Wondering how much you should spend on food? Your grocery budget will depend on your food preferences, where you shop, and the size of your household. That said, spending $300 a month on food is well below the approximately $504 monthly average Americans spend according to the Bureau of Labor Statistics (BLS). It may be a big enough grocery budget for a single person. However, the grocery budget for a family of five, for example, might need to be much larger.

What is a realistic monthly grocery budget?

The average cost of groceries is $504 a month, according to the BLS. This may serve as an appropriate benchmark. The United State Department of Agriculture provides food budget estimates of around $300 to $500 per month per adult. Costs also vary widely by age, household size, and location. A grocery budget table can help you determine the average cost for your situation.

Photo credit: iStock/FreshSplash

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

SoFi Invest®

SOMB-Q425-015

It’s no secret that banks appreciate affluent depositors and their high account balances. To attract and keep these wealthy customers, many banks and credit unions have established premium banking services, also known as premier banking.

Premium banking typically brings high-dollar clients a suite of benefits such as higher savings yields, waived account fees, dedicated customer service, and no-charge ATM access.

If your balance is big enough, you can receive extra privileges and services. Here’s what to know if you’re looking to pursue deluxe status.

What Are Premium Banking Services?

Premium banking services are elite privileges that a bank extends to its loyal and financially comfortable customers. The benefits often center on a rewards checking account paired with a rewards savings account; qualified customers may also receive exclusive deals on bank credit cards or loans.

Amenities may include:

•   Dedicated personal bankers

•   Investment consultations

•   Lower fees for other financial products within the same bank or credit union

•   Higher annual percentage yields (APYs) on savings accounts

•   Reduced annual percentage rates (APRs) on loans

•   Increased daily or weekly limits for withdrawals, purchases, and money transfers

•   Free or low-cost wire transfers

•   Overdraft protection

•   Rewards credit cards

•   ATM fee reimbursements

How Does Premium Banking Work?

As noted above, premium banking enhances services and lowers costs for preferred customers. To qualify for these perks and price breaks, clients generally must keep high average daily balances in their checking and savings accounts; they may also maintain investment accounts and have multiple bank loans.

The required balances vary, but amounts between $10,000 and $15,000 are common. Clients can use the total of their balances from different types of bank accounts to meet these financial requirements.

In exchange, the bank may waive monthly fees, pay higher APYs on savings accounts, and provide discounts on loans. A designated personal banker typically handles the client’s account needs and coordinates perks and services such as credit card bonus offers and free financial consultations.

Types of Premium Banking

The phrase “premium banking” usually refers to upgrades and privileges made available to banks’ affluent or relationship-focused clients. Sometimes, though, the term has a broader meaning. It may encompass the top-tier services of private banking and wealth management for depositors with high or ultra-high net worth.

Premium Banking

In brief, premium banking typically bundles premium checking accounts and savings accounts with loans, mortgages, or other financial products. Clients enjoy discounted loan APRs or lower fees across the board due to their many connections to the bank.

If a high-yield savings account is part of the premium banking package, it’s likely to have an amped-up APY and few or no fees.

There may also be other special deals, including enhanced credit card rewards.

Banks generally assign dedicated financial officers to manage relationships with premium clients. Your personal banker can troubleshoot for you and act as a point person for exclusive perks (e.g., airport lounge access when traveling) as well as ordinary bank business like wire transfers or safe deposit box rentals.

Private Banking

A more rarefied version of premium banking is private banking. This type of retail banking caters to wealthy individuals, so minimum balance requirements can be quite steep. Clients may need to maintain average daily balances ranging from $100,000 to $10 million or more, depending on the bank.

Some institutions have established service tiers (such as gold, platinum, or diamond) that reflect the client’s combined balances. As a rule of thumb, the higher the balance, the more exclusive the tier and the more extensive the benefits.

The assistance provided by private bankers can be narrowly focused or expansive. It may include anything from strategizing to maximize credit card rewards for lavish travel to facilitating a jumbo mortgage to setting up a financial plan.

Wealth Management

Wealth management can be seen as an extension of private banking, so the two are sometimes marketed together to high net worth and ultra-high net worth individuals. In addition, wealth management professionals may work with private family trusts, including those with governing boards.

Wealth management goes beyond banking functions, however. A private banker might help you with various bank accounts, credit cards, and loans, as discussed above. A wealth management specialist would get familiar with all the ins and outs of your financial life in order to advise you on investments, trusts, retirement planning, or estate planning. These issues can be extremely complex, especially for ultra-high net worth clients.

Benefits of Premium Banking Services

Talking and teaming up with a personal banker can be beneficial in itself — and not just for tips on saving or making money. A personal banker can teach an affluent person how to move from being a depositor to being a steward of their wealth.

The banker uses their deeper expertise to give you individually tailored support and guidance. Meanwhile, you can learn from their knowledge and experience.

The banker may also have a network of contacts you can work with on larger issues such as estate planning or tax strategy.

Examples of Premium Banking Services

Premium banking services can include any number of price breaks and lifestyle bonuses. Some familiar examples are:

•   Preferential rates: These could be higher interest rates on savings accounts and certificates of deposit (CDs) or discounts on loans, insurance, mortgages, and lines of credit.

•   Upgraded credit cards: Visa Signature and Mastercard Platinum are examples. Preferred customers can thereby access more advantages of credit cards, such as enhanced rewards, discounts, and travel perks.

•   Global and international banking support: Assistance with currency services and offshore accounts may be available, plus sweeteners such as zero foreign transaction fees and access to emergency cash services.

•   Travel privileges: Premium status may mean priority boarding at airport gates, free lounge access, or rental car discounts.

•   Concierge services: These include assistance with booking travel, making dining reservations, and getting tickets to exclusive events such as SoFi Plus Experiences.

•   Advanced cash management and financial planning: Wealthy customers can sort out complex cash flow issues and, if needed, get professional advice from investment and insurance experts.

•   Waived banking fees: Monthly maintenance charges, out-of-network ATM fees, wire transfer fees, foreign transaction fees, and charges for cashier’s checks or money orders may all be reduced or waived.

Alternatives to Premium Banking Services

Bank customers who don’t have thousands of dollars to park in a checking, savings, or investment account can still score better loan APRs, fewer fees, or specific financial benefits if they’re willing to cast a wider net.

•   Credit unions: For comparatively low loan rates and fewer fees, some people consider credit unions. They offer many of the same in-person services as traditional banks, and customer deposits are federally insured by the National Credit Union Administration.

•   Online banks: These banks typically have lower overhead costs because they operate entirely online. Customers may not mind the lack of physical branches if their bank saves them money on fees and gives them higher APYs on savings and checking accounts. Like traditional bank accounts, online bank accounts are insured by the Federal Deposit Insurance Corporation (FDIC). Some online institutions also give you access to premium banking perks through membership programs such as SoFi Plus.

•   Financial technology (fintech) firms: For convenience, cash-back rewards, fewer monthly fees (e.g., fee-free overdraft coverage), and digital features such as budgeting tools, you might want to look into fintech options. These companies partner with traditional banks to provide app-based financial services along with FDIC insurance for customer accounts.

•   Brokerages: Financial giants such as Fidelity and Schwab offer cash management accounts that function like checking accounts but often provide better interest rates. That’s because these accounts keep a customer’s uninvested cash in money market funds. A brokerage account can work well for people who want to consolidate their investments and banking in one place.

•   Community banks: These local institutions focus on the needs of the communities they serve. They provide personalized service and a full range of banking products, often balancing the friendly feel of a credit union with the features of a traditional bank.

In weighing these and other options, it’s important to consider your specific needs. A credit union or community bank may be a good fit, for example, if you particularly want in-person support. Online banks or brokerage cash management accounts could be appropriate if high interest on savings is a priority.

Premium Banking Tips

•   Strategizing your spending — with or without guidance from your personal banker — could help you unlock additional value. For example, if you have augmented credit card points, exchanging them for cash often gives you the worst conversion rate. A banker might note that using those points for travel could get you a lot farther.

•   Get familiar with the less splashy perks that go along with your accounts. Examples might include early credit for direct deposits or transfer fee waivers.

•   If premium plastic is one of your benefits, you’ll want to stay current on relevant credit card rules, as some perks may be limited-time-only or have stringent terms and conditions.

•   Use your banker to coordinate with tax, legal, and investment specialists within the bank. Not only will this ensure that you get cohesive advice, but it should also save you time and effort.

The Takeaway

Premium banking offers affluent customers enhanced services, privileges, and perks. To qualify, customers usually must maintain very high average daily balances across their accounts; in exchange, they get added convenience and savings. Three common benefits are waived fees, higher savings rates, and free consultations with a dedicated personal banker.

FAQ

What is the meaning of premium banking?

The phrase “premium banking” refers to special account benefits and personalized financial services for high net worth individuals. These may include consultations with dedicated relationship managers, wealth management assistance, investment advice, and account perks like waived fees and better loan rates.

Is premium banking worth it?

The answer depends on your assets and your lifestyle. If you can easily maintain the necessary minimum balances or if you use multiple services from the same bank (such as loans, credit cards, and investments), the convenience and perks of premium banking may be worth the costs. Other customers may find that, for them, premium banking’s particular benefits don’t warrant the high fees or balance requirements.

What does a premium bank account mean?

A premium bank account is a bank account that offers extra features such as higher interest on deposits, discounts on loans, low or no fees on many transactions, and dedicated support from a personal banker. It’s generally marketed to customers who can maintain substantial balances or who contract for multiple bank products and services.

What are the four types of bank accounts?

The four types of customer accounts that are available at a bank or credit union are:

•   Checking accounts: This essential account provides quick access to funds for everyday spending and transactions.

•   Savings accounts: People often use this type of account to store money for emergencies and short-term goals while earning interest. High-yield savings accounts are widely available.

•   Certificates of deposit (CDs): This is a more constrained form of savings account in which customers lock up funds for a set period of time in exchange for fixed interest rates and guaranteed returns. Credit unions’ version of a CD is called a share certificate.

•   Money market accounts (MMAs): This type of savings account combines higher interest rates with checking account features.

What are the advantages of a premium bank account?

Common advantages of premium bank accounts include waived or reduced fees (e.g., for ATM use or overdrafts), higher APYs on savings account balances, lower rates on loans, and complimentary perks such as priority customer service, financial planning consultations, travel benefits, or identity theft protection.

Photo credit: iStock/fizkes

SoFi Plus: SoFi Plus is a premium membership that gives members access to our best rewards, benefits, and more when they pay the SoFi Plus Subscription Fee. Benefits are subject to change and may not be available to everyone. All terms and conditions applicable to the use of SoFi Plus apply. To learn more about SoFi Plus and available benefits and terms, please see the SoFi Plus page.

*Based on a series of blinded surveys of financial memberships across banking, borrowing, investing, and credit cards. A nationally representative sample of 900 consumers were asked to rank offerings based on the question “Which financial membership brand is most rewarding?” Results as of January 2025. See sofi.com/plus-survey for details.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

SoFi Invest®

SOMB-Q425-013

From airlines to banks to retailers, many of the best-known companies now offer loyalty programs. The details of these programs vary widely, but they all serve the same purpose: to attract new followers and reward repeat customers with special membership perks.

Since membership rewards programs are so widespread, it’s worth understanding how they work. Here’s an overview.

What Are Membership Rewards?

Membership rewards are incentives that a company offers its customers as encouragement to use its products or services again and again.

Companies find membership rewards systems—known as loyalty programs—to be effective in identifying, wooing, and keeping customers. In fact, the vast majority (85%) of consumers say loyalty programs make them more likely to continue shopping with those brands.

Some loyalty programs are free, while others charge their members a subscription fee. A membership subscription to SoFi Plus, for example, costs $10 a month to subscribe, or you can qualify for complimentary membership through eligible direct deposit or qualifying deposits through March 2026.¹

Many loyalty programs have membership tiers or status levels. Members who qualify for a higher tier can access more valuable rewards. To ascend to those tiers, however, a member may have to earn a certain number of rewards points, pay higher fees, or both.

How Do Membership Rewards Work?

Despite their many variations, membership rewards programs are all fundamentally similar. The core principle is simple. Consumers enroll in loyalty programs to gain rewards, which they earn by accumulating rewards points.

Members can typically rack up rewards points by taking actions: making purchases, referring friends, engaging with online events, and so on. Those who earn a given number of rewards points can trade them for benefits as set out in the membership agreement. (We’ll touch on specific benefits later in this article.)

Aside from points, members may also qualify for cash back rewards or discounts on merchandise or services. Premium membership tiers—possibly requiring a higher fee—may give them access to special benefits such as free shipping or priority service.

Credit cards in particular emphasize loyalty programs. Cardholders can gain credit card points by spending a specified amount of money each month or quarter.

And opportunities to earn points are easy to find. Members can pile up points by using a rewards credit card regularly for shopping, dining out, travel costs, household expenses, and other things.

Some people try to game the membership rewards system by credit card churning. Churning involves opening a credit card account to snag sign-up rewards and then promptly closing it. The practice isn’t illegal, but it is risky. Not only could multiple hard credit pulls in a short time be harmful to your credit score, but also, issuers are likely to deny future card applications if you’ve opened too many accounts in the last year or two.

Recommended: 10 Credit Card Rules You Should Know

Benefits of Membership Rewards Programs

Rewards programs don’t work unless they can attract and hold members. So the benefits need to be noteworthy, useful, and not too hard to earn.

For example, the SoFi Plus Smart Card rewards users with points equal to 5% cash back rewards² on money spent at grocery stores.

In general, an easy way to earn points is through credit card bonus offers to newcomers or big spenders. For instance, Discover gives new cardholders double the cash back they’ve earned during their first year.

An advantage of credit cards that are affiliated with airlines or hotels is that rewards points can often be converted to airline miles. An abundance of miles can often be redeemed for deals on flights, hotels, or vacation packages, strong incentives for the avid traveler.

People who choose cash back rewards points can use them to reduce their outstanding account balance. The value of the points will generally show up as an account statement credit.

Other benefits you can get with a membership subscription or credit card rewards might include discounts, gift cards, free merchandise, members-only content, early access to new products, or perks like free shipping.

In some cases, just being a member of a loyalty program gives you access to certain benefits. For example, SoFi Plus members are eligible to take part in SoFi Plus Experiences. Among the awards are VIP access to NFL and NBA games, concert tickets, and passes to music festivals.

Examples of Membership Rewards Programs

The countless membership rewards programs out there offer a universe of benefits. Here are several familiar variations.

Frequent flyer miles are a familiar type of membership rewards program. Members accumulate miles they can redeem for award tickets, upgrades to business or first class, free wifi, and more.

Some banks feature rewards checking accounts. (As of this writing, SoFi does not.) Account holders who meet certain conditions—such as direct deposit amounts, a defined average balance, or a minimum number of transactions—may get cash back, fee reimbursements, shopping discounts, or points you can convert to airline miles.

SoFi Plus is a paid rewards program for customers of SoFi Bank. The program provides qualifying members with extras that range from cash back and deposit matching to higher interest rates on savings accounts and professional financial planning sessions.

In another example, cosmetics retailer Sephora sponsors the Beauty Insider program, with its Insider, VIB, and Rouge tiers. Members earn points by making purchases. In return for their loyalty, they may receive trial-sized product samples, birthday gift sets, free shipping, and more.

Amazon Prime, which doesn’t issue rewards points, shows there can be a difference between subscriptions and membership. Subscribers who pay the $14.99 per month (or $139 per year) can enjoy convenience bonuses for shoppers, free fast shipping, unlimited photo storage, grocery discounts, low-cost prescriptions, and access to extensive video, audiobook, and music libraries. Additional monthly fees unlock further benefits. By contrast, membership loyalty programs foster engagement and connection among people with similar interests.

Ways to Earn Membership Rewards

After you’ve become a member of a brand, card, or store, the obvious way to earn rewards points is by making purchases in those domains. But you may find that the loyalty program offers other, more creative ways to earn rewards, such as:

•   Check-ins that give you points just for visiting the store

•   Providing personal details so that the program has a profile of you

•   Signing up for the brand’s newsletter

•   Boosting the brand’s social media presence by reposting or sharing its content

•   Reviewing products or taking surveys

•   Referring new customers who sign up or make a purchase

•   Attending members-only events or workshops

•   Doing gamified tasks that award you points or point multipliers

If you have signed up for the newsletter or subscribed to the company’s social media feed, you’ll very likely be informed about additional ways to earn rewards.

Membership Rewards Tips

•   Make sure you understand the program’s rules. To maximize credit card rewards, read through all the promotional materials for your loyalty program. You may find that it awards points for actions you hadn’t thought of.

•   Track your progress. Check in regularly to the program’s tracker app or a dedicated website to see your points tally and your progress toward premium tiers.

•   Learn new ways to earn points. You may find that you can pick up rewards points or bonuses by referring new members, reviewing products, providing survey feedback, participating in social media, or something else. Your program should keep you posted on promotional offers.

•   Keep track of expiration dates. Be sure to use accumulated rewards points before they expire.

•   Find out the easiest way to redeem rewards points. Your program will have instructions and conditions for redeeming your rewards points. You may be able to do this through a dedicated app, account page, or website portal.

•   Don’t settle for rewards you don’t care about. Instead, aim to redeem rewards points for something you actually want. This may be cash back, product discounts, or access to exclusive events such as SoFi Plus Experiences. Small perks like product samples or free delivery may be easier to earn.

The Takeaway

Membership rewards programs operate by encouraging members to accumulate points through various actions—such as making purchases or referrals—which can then be redeemed for valuable benefits such as cash back, discounts, travel miles, or exclusive experiences. Members who opt for non-cash rewards frequently get more purchasing power for their points than they’d have with cash back.

FAQ

What is the difference between subscription and membership?

In general, subscriptions offer continuous access to products or services for a recurring fee. Examples might include streaming video or meal kits. After you subscribe, you typically don’t earn points or rewards for taking any particular action.

Membership programs, by contrast, tend to incorporate loyalty features. These might be rewards for repeat purchases (e.g., buy nine sandwiches and the tenth one is free), premium tiers with more valuable awards, gift cards, branded merchandise, or the like.

Do membership rewards expire?

It depends. Some programs may offer lifetime membership points to retain customers. In other cases, points may expire after a set period (such as 12 or 24 months) or on a rolling basis. Sometimes, a member with points about to expire may be able to reactivate them by taking a specified action, such as buying something with a rewards credit card.

What are some creative ways to earn membership rewards?

Depending on your loyalty program, you may be able to score more rewards points through activities such as:

•   Checking in when you visit the store

•   Providing personal details for the program’s profile of you

•   Signing up for the brand’s newsletter

•   Boosting the brand’s visibility on social media by reposting or sharing its content

•   Reviewing products or taking surveys

•   Referring new customers who sign up or make a purchase

•   Attending member-exclusive events or workshops

•   Doing gamified tasks that award you points or point multipliers

The company’s newsletter and social media feed will very likely keep you informed about new ways to earn rewards.

What is the difference between membership rewards and statement credits?

Customers earn their membership rewards, which are delivered in the form of points, cash back, or other perks and privileges. When you redeem those rewards points (or cash), you may decide to apply them to your bank or credit card account to lower its balance. You’ll see the amount recorded on your account statement as a credit.

What are some reasons to choose membership rewards over cash back rewards?

Points redeemed for non-cash rewards typically end up having greater purchasing power than cash back rewards points, according to Experian. Beyond that, it’s a question of lifestyle. Cash back is simple, but you might prefer membership rewards if you:

•   Spend enough on your credit card that the value of the rewards exceeds the annual fee

•   Travel frequently enough that you appreciate benefits like airport lounge access and travel insurance

•   Value elite amenities and upgrades such as business class flights and luxury hotels

•   Don’t mind actively managing your points and overall spending for best results

Naturally, you’ll want to check the loyalty program agreement first for information. It should spell out the value of your rewards points and mention any affiliates with additional benefits.

Photo credit: iStock/FreshSplash

¹SoFi Plus: SoFi Plus is a premium membership that gives members access to our best rewards, benefits, and more when they pay the SoFi Plus Subscription Fee. Benefits are subject to change and may not be available to everyone. All terms and conditions applicable to the use of SoFi Plus apply. To learn more about SoFi Plus and available benefits and terms, please see the SoFi Plus page.

*Based on a series of blinded surveys of financial memberships across banking, borrowing, investing, and credit cards. A nationally representative sample of 900 consumers were asked to rank offerings based on the question “Which financial membership brand is most rewarding?” Results as of January 2025. See sofi.com/plus-survey for details.

²5% Cash Back Rewards Program
Earn 5% cash back rewards on eligible grocery store purchases with the SoFi Smart Card. Cash back rewards are issued in the form of SoFi Member Rewards points. Members earn 5 points for every dollar spent on eligible grocery store purchases. SoFi, in its sole discretion, determines grocery store eligibility. Superstores like Walmart and Target, warehouse clubs like Costco and Sam’s Club, convenience stores, grocery delivery services, and meal-kit delivery services are not considered grocery stores. All terms and conditions applicable to the use of SoFi Member Rewards apply. To learn more about SoFi Member Rewards, please see the SoFi Member Rewards page. No rewards points will be earned with respect to reversed transactions, returned purchases, cash advances, or other similar transactions.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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