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 $4,875 to $13,973 on average for food per year. If you’re spending $500 a month ($6,000/ year) on groceries, with the lowest cashback 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 my savings for the year, I get a cash-back credit card that matches my top spending categories. By using a credit card for everyday purchases, I can easily make money back.
How does cashback on a credit card work?
The credit card issuer sets a rewards program, and every time 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 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
- 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.
- Cash-back rewards can have limits. For example, with one credit card, you can earn 3% on groceries but only on up to $6,000 dollars of qualifying purchases for the year.
- When credit card issuers give a category of supermarkets or grocery stores rewards, they usually do not include superstores (like Walmart and Target), discount stores, and warehouses. Also, a gas station that’s 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).
Side Note: Did you know that American Express is a bank as well?
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 of this new knowledge, 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 to have them.
***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 Cash Back Credit Cards for Groceries
| Credit Card/ Credit Processing Network | Rewards | APR |
|---|---|---|
| Capital One® SavorOne® Rewards Credit Card | 3% cash back at Grocery Stores, Dining, Popular Streaming Services, and Entertainment | 19.24% – 29.24% variable APR (After 15 mos. at 0%) |
| Blue Cash Everyday® Card from American Express AMEX | 3% cash back at U.S. Supermarkets, Gas Stations, and Online Retail Purchases | 18.74% to 29.74% variable APR (After 15 mos. at 0%) |
| Chase Freedom Unlimited VISA | 3% to 1.5% cash back on all purchases | 19.49% to 28.24% variable APR (After 15mos. at 0%) |
| Discover it® Cash Back Discover | 5% cash back on rotating categories, 1% on all other purchases | 16.49% to 27.49% variable APR (After 15 mos. at 0%) |
| Citi® Double Cash Card Mastercard | 1% on purchase, and an additional 1% when you pay min. balance | 18.49% to 28.49% variable APR (After 18 mos. at 0%) |
| Bank of America® Customized Cash Rewards Credit Card | 3% in your category of choice. 2% grocery stores and wholesale clubs. 1% on all other purchases. | 17.49% to 27.49% variable APR (After 18 statements at 0%) |
1. Capital One® SavorOne® Cash Rewards Credit Card
- Annual Fee: $0
- Rewards Rate: 1% – 3%
- Foreign Transaction Fee: None
Details:
- Earn unlimited 3% cash back on dining, popular streaming service, entertainment, grocery stores.
- 1% cash back on all other purchases
- Cashback won’t expire for the life of the account and you can redeem any amount.
- 0% intro APR on purchases for 15 months; 19.24% – 29.24% variable APR after that
- 3% fee on balance transfers 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% cashback.
2. Blue Cash Everyday® Card from American Express
- Annual Fee: $0
- Rewards Rate: 1% – 3%
- Foreign Transaction Fee: 2.7%
Details:
- 3% Cash Back at U.S. supermarkets, gas stations, and online retail purchases (on up to $6,000 per year in purchases then earn 1%).
- 0% intro APR for 15 months on purchases then a variable rate, currently 18.74% to 29.74%.
- $5 or 3% fee on balance transfers
Cons:
- Superstores and warehouse clubs are not considered supermarkets
- Superstores, supermarkets, and warehouse clubs that sell gasoline are not considered gas stations
3. Chase Freedom Unlimited®
- Annual Fee: $0
- Rewards Rate: 1.5% – 3%
- Foreign Transaction Fee: 3%
Details:
- 3% Cash Back at restaurants, drugstores, and travel bought through Chase Ultimate Reward
- Earn unlimited 1.5% cash back on all other purchases
- Cashback won’t expire for the life of the account and you can redeem any amount.
- 0% Intro APR for 15 months from account opening on purchases and balance transfers, then a variable APR of 19.49% to 28.24%.
- $5 or 3% fee on balance transfers
4. Discover it® Cash Back
- Annual Fee: $0
- Rewards Rate: 1% – 5%
- Foreign Transaction Fee: None
Details:
- Earn 5% cash back 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.
- 0% Intro APR for 15 months from account opening on purchases and balance transfers, then a variable APR of 16.49% to 27.49%.
- 3% intro balance transfer fee and 5% on any amount posted after June 10, 2023
5. Citi® Double Cash Card
- Annual Fee: $0
- Rewards Rate: 1% – 2%
- Foreign Transaction Fee: 3%
Details:
- Earn 1% on all purchases then another 1% when you pay the minimum balance due.
- Cash back never expires, and you can redeem any amount.
- 0% Intro APR for 18 months from account opening on purchases and balance transfers, then a variable APR of 18.49% to 28.49%.
- Balance transfer must be completed in the first 4 months and will be charged 3% (min. $5) and 5% after that.
6. Bank of America® Customized Cash Rewards Credit Card
- Annual Fee: $0
- Rewards Rate: 1% – 3%
- Foreign Transaction Fee: 3%
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 18 statements from account opening on purchases and balance transfers, then a variable APR of 17.49% to 27.49%.
- 3% fee on balance transfers
7. Costco Anywhere Visa® Card by Citi
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. I do a lot of shopping at Costco because I like to buy in bulk, so that is a card to consider.
- Annual Fee: $0 (But requires membership)
- Rewards Rate: 1% – 4%
- Foreign Transaction Fee: None
Details:
- 4% cash back on gas and EV charging.
- 3% cash 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. Cashback is given annually as a certificate redeemable for cash or merchandise.
- 19.74% variable APR on purchases and balance transfers.
- Balance transfer must be completed in the first 2 months and will be charged 5% (min. $5).
How to Save More on Groceries
While getting this cashback 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.
Related Reading: Healthy Budget Grocery List For Two: $200/Month
Summary
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.
For example: If 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.
For this scenario, the flat rate credit 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.
