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.
Key Points
• Grocery rewards credit cards provide a strategic method for saving money by earning cash back or points on supermarket purchases with each shopping trip.
• Cards offer different rewards structures, including flat rates on all purchases or higher bonus rates for groceries, with some featuring rotating spending categories.
• Sign-up bonuses become available when new cardholders meet minimum purchase requirements within specified timeframes, eventually crediting rewards to accounts.
• Responsible card usage helps improve credit scores while allowing rewards accumulation across multiple spending categories beyond just grocery purchases.
• Understanding store eligibility rules and annual earning caps ensures maximum rewards, as gas stations and convenience stores may not qualify as grocery purchases.
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.
| Type of Household | Annual Grocery Budget | Annual Cash Back from 6% Credit Card Rewards |
|---|---|---|
| Single male, 19-50 years old | $4,295.20 | $257.12 |
| Single female, 19-50 years old | $3,853.20 | $231.19 |
| Family of 3 | $6,912 | $414.72 |
| Family of 4 | $7,260 | $435.60 |
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.
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