February 21, 2020

Cash Back: The 6 Best Credit Cards For Groceries

Groceries are usually one of our biggest monthly expenses, so wouldn’t it be great if you could earn money on what you spend? Well you can! It’s one of the most popular categories on cash-back credit cards for good reason, everybody needs to eat. According to the USDA, households spend between $4,109 to $13,348 on average a year. If you’re spending $500 a month ($6,000/ year) on groceries, with the lowest cash back rate of 1%, you’d earn $60. When you get one of the best credit cards for groceries, you can earn even more!

To maximize on my savings for the year, I get a cash-back credit card that matches my top spending categories. By using the credit card for everyday purchases, I can easily make money back.

How does cash back on a credit card work?

The credit card issuer sets a rewards program, and everytime you make an eligible purchase under it, you get a percentage of your spending back. There are different types of cash back credit cards:

  • Flat Rate – Usually 1% to 2% received back on all eligible purchases. They are simple to use because you don’t have to worry about if you’re spending at a qualifying store.
  • Bonus Categories – All your spending might receive a 1% cash back, but special categories, like groceries, could get 3% instead. This is great to maximize on savings where you spend the most, but you have to pay attention to where you spend.
  • Rotating Categories – Rotating categories on a credit card change at different times of the year. For instance, you might earn 5% on groceries only from January to March, then from June to August, it’ll change to earning extra on gas. You might have to remember to enroll for every savings period when it changes and shop at specific places to earn the rewards.

Things to consider when looking at credit cards

  1. If you’re only making the minimum payments on your credit cards, the interest that accrues on your spending will negate any rewards you’ll receive. Every month, I pay off my full statement and it also works great for building credit.
  2. Cash back rewards can have limits. For example, with the Blue Cash Everyday® Card from American Express you can earn 3% on groceries, but only on up to $6,000 dollars of qualifying purchases for the year.
  3. When credit cards issuers give a category of supermarkets or grocery stores for rewards, they usually do not include superstores (like Walmart, Target), discount stores, and warehouses. Also, a gas station that’s a part of a store, like Costco gas, might not count as gas. This is partly due to how credit card processors code merchants, and how the credit card issuer uses this information.
Merchants are given a specific merchant category code (MCC) based on their primary product. These are given by one of the four major credit processing networks in the U.S. (Visa, MasterCard, Discover, and American Express). For instance, Office Depot would be under a category relating to office supplies, so even if you buy food there, it would still come up under that.

With all this knowledge I just dropped on you, it’s time to help you pick a card. These are what I feel are the best credit cards for cash back with no annual fee. Of course, be sure to look over the specific card’s program rules to see if it makes sense for you. All are terms subject to change and eligibility, read over the current rewards program, rates and fees with your specific usage in mind to see if they will apply to you.

The Best Credit Cards for Groceries

Credit Card/ Credit Processing Network Current Bonus Offer Rewards Rewards Limit APR
Capital One® SavorOne® Cash Rewards Credit Card
World Elite Mastercard
$150 (After $500 in 1st 3 months)2% Grocery Stores3% Dining and Entertainment1% Other PurchasesNone15.74% – 25.74% variable APR (After 15mos. at 0%)
Blue Cash Everyday® Card from American Express
AMEX
$150(After $1,000 in 1st 3 months)3% U.S. Supermarkets2% U.S. Gas Stations and select U.S Dept. Stores1% Other Purchases3% U.S. Supermarkets limited to $6,000 then changes to 1%14.49% to 25.49% variable APR (After 15mos. at 0%)
Chase Freedom Unlimited
VISA
$200(After $500 in 1st 3 months)1.5% on all purchasesNone13.49% – 25.24% variable(After 15mos. at 0%)(After 15mos. at 0%)
Discover it® Cash Back
Discover
Cashback Match5% rotating, 1% on all other purchases5% Reward based on quarter with a $1,500 max13.49% – 24.49% variable(After 14mos. at 0%)
Citi® Double Cash Card
Mastercard
None1% on purchase, and an additional 1% when you pay min. balanceNone15.49% – 25.49% variable(After 18mos. at 0%)
Bank of America® Cash Rewards Credit Card
Mastercard
$200(After $1000 in 1st 3 months)3% in category of choice. 2% grocery stores and wholesale clubs. 1% all other purchases. 
3% and 2% cash backs are limited to $2,500 quarterly.15.74% – 25.74% variable(After 15mos. at 0%)

Capital One® SavorOne® Cash Rewards Credit Card

Intro Bonus: $150
Annual Fee: $0
Rewards Rate: 1% – 3%
Foreign Transaction Fee: None

Earn a one-time $150 cash bonus after you spend $500 on purchases within the first 3 months from account opening

Details:

  • Earn unlimited 3% cash back on dining and entertainment, 2% at grocery stores and 1% on all other purchases
  • Cash back won’t expire for the life of the account and you can redeem any amount.
  • 0% intro APR on purchases for 15 months; 15.74% – 25.74% variable APR after that
  • 0% intro APR on balance transfers for 15 months; 15.74% – 25.74% variable APR after that; 3% fee on the amounts transferred within the first 15 months

Cons:

  • Grocery purchases made at warehouse clubs, discount stores, and super stores (such as Walmart and Target) will earn 1% cash back.

Blue Cash Everyday® Card from American Express

Intro Bonus: $150
Annual Fee: $0
Rewards Rate: 1% – 3%
Foreign Transaction Fee: 2.7%

Earn a $150 statement credit after you spend $1,000 in purchases on your new Card within the first 3 months.

Details:

  • 3% Cash Back at U.S. supermarkets (on up to $6,000 per year in purchases, then 1%).
  • 2% Cash Back at U.S. gas stations and at select U.S. department stores, 1% back on other purchases.
  • 0% intro APR for 15 months on purchases then a variable rate, currently 14.49% to 25.49%.
  • 0% intro APR for 15 months on balance transfers then a variable rate, currently 14.49% to 25.49%. Must be requested in the 1st 60 days of opening.

Cons

  • Superstores and warehouse clubs are not considered supermarkets
  • Superstores, supermarkets and warehouse clubs that sell gasoline are not considered gas stations

Chase Freedom Unlimited®

Intro Bonus: $150
Annual Fee: $0
Rewards Rate: 1% – 1.5%
Foreign Transaction Fee: 3%

Earn a $150 Bonus after you spend $500 on purchases in your first 3 months from account opening.

Details:

  • Earn unlimited 1.5% cash back on all purchases.
  • Cash back expires when cash back is not earned within a 12 month period. 
  • 0% Intro APR for 15 months from account opening on purchases and balance transfers, then a variable APR of 13.49%-25.24%. 3% intro balance transfer fee within the first 60 days, with a minimum of $5.

Other cards with 1.5% Unlimited:

American Express Cash Magnet® Card
Capital One® Quicksilver® Cash Rewards Credit Card

Discover it® Cash Back

Intro Bonus: Cashback Match
Annual Fee: $0
Rewards Rate: 5% – 1%
Foreign Transaction Fee: Not Specified

All the cash back you earn in the first year after opening an account will be matched.

Details:

  • Earn 5% cashback on rotating categories that change quarterly ($1,500 quarterly maximum). All other purchases earn 1%.
  • Cash back never expires, and you can redeem any amount any time.
  • 0% Intro APR for 14 months from account opening on purchases and balance transfers, then a variable APR of 13.49%-24.49%. 3% intro balance transfer fee within the few months (deadline specified in offer).

Compare to:

Chase Freedom® credit card

Citi® Double Cash Card

Intro Bonus: None
Annual Fee: $0
Rewards Rate: 2% – 1%
Foreign Transaction Fee: 3%

Details:

  • Earn 1% on all purchases then another 1% when you pay the minimum balance.
  • Cash back never expires, and you can redeem any amount any time.
  • 0% Intro APR for 18 months from account opening on purchases and balance transfers, then a variable APR of 15.49%-25.49%. Balance transfer must be completed in the first 4 months and will be charged 3% (min. $5).

Bank of America® Cash Rewards Credit Card

Intro Bonus: $200
Annual Fee: $0
Rewards Rate: 3% – 1%
Foreign Transaction Fee: 3%

Earn a $200 cash reward bonus after making $1,000 in purchases in the first 90 days.

Details:

  • 3% cash back on the category of your choice (gas, online shopping, dining, travel, drug stores, or home improvement/furnishings) which can be changed every month. 2% cash back at grocery stores and wholesale clubs. 1% cash back on all other purchases. 3% and 2% cash backs are limited to $2,500 quarterly.
  • Cash rewards don’t expire.
  • 0% Intro APR for 15 months from account opening on purchases and balance transfers, then a variable APR of 15.74% – 25.74%. Balance transfer must be made within 60 days and will be charged 3% (min. $10).

Store-Specific Credit Cards

If you’re doing most of your shopping at one place, it might also be worth it to get a credit card at that store. For me, I do a lot of shopping at Costo because I like to buy in bulk. However, it only gives 2% cash back on their products and has the most savings on gas, 5%. Since I get more savings on gas elsewhere, it wouldn’t be particularly helpful for me to get a credit card here over another card that gives a flat rate of 2%.

Costco Anywhere Visa® Card by Citi

Intro Bonus: None
Annual Fee: $0 (But requires membership)
Rewards Rate: 5% – 1%
Foreign Transaction Fee: None

Details:

  • 5% cash back on gas, including Costco gas. 3% back on restaurant and travel. 2% on all purchases at Costco and Costo.com. 1% cash back on all other eligible purchases.
  • Requires a Costco membership and must be maintained to redeem the rewards. Cash back is given annually as a certificate redeemable for cash or merchandise.
  • 16.74% variable AP on purchases and balance transfers. Balance transfer must be completed in the first 2 months and will be charged 3% (min. $5).

How to Save More on Groceries

While getting this cash back is great, it’s not a whole lot of money. To save even more, you can also coupon, comparison shop for deals at different stores,  and take a few minutes to scan your receipt into apps like Ibotta and Checkout 51. However, don’t purchase extra things that you don’t usually use just because you’ll save money. 

Bottom Line

These cash back credit cards have no annual fee, if you choose a card that has one, it might outweigh any rewards you would receive. This is also true if you carry a balance, the interest fees will add up.

When looking at the best credit cards for groceries, consider the card’s cash back rules and how/ where you use your card. 

Example: 

I wanted to compare if 2% cash back for the whole year or 5% for the quarterly bonus would be better. This would be a flat rate card vs a rotating categories card with regular spending mostly on groceries on gas.

Comparing the Best Credit Cards For Groceries Chart

For this scenario, the flat rate cred card would bring the most rewards. However, if you spend a lot in other categories as well or are able to bulk shop for the whole year in those 3 months, it might be more worth it to get a rotating category card.

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