Can You Buy Groceries With A Credit Card
Interchange fees are basically an incentive the card networks use to encourage banks to issue their branded credit cards and debit cards, which is one reason why banks like for you to use their cards to make purchases. They get a tiny slice of every sale.
can you buy groceries with a credit card
Interchange rates are typically a combination of a percentage of the sale plus a fixed per-transaction fee (for example, 1.19% + $0.10), but the percentages and per-transaction fees vary widely depending on the card brand, card type, transaction type, and type of business.
Cooking at home is usually more cost-effective than dining out. And if you're looking to stretch your grocery budget even further, you might want to consider a rewards credit card that can help you earn over $100 a year on groceries.
The average American spends about $5,174 a year, or roughly $431 a month, on groceries, according to a sample budget based on the latest spending data available from the location intelligence firm Esri. That's more than Americans spend on dining out ($3,675 annually).
The best grocery rewards cards offer up to 6% cash back at supermarkets. While they usually exclude wholesale clubs such as Costco and BJ's, and big box stores like Target and Walmart, you can still take advantage of these rates at Whole Foods, Krogers, Albertsons and other big-name grocers. Many top grocery credit cards also offer introductory interest-free periods, giving you some extra time to pay off any debt.
CNBC Select analyzed 27 popular rewards cards using an average American's annual budget and dug into each card's perks and drawbacks to find the best grocery store rewards cards based on your spending habits. (See our methodology for more information on how we choose the best cards.) Here are our top picks for cards offering supermarket rewards.
If you want to maximize cash back on groceries, this card is for you. In addition to high grocery rewards, there's an unlimited 6% cash back on select streaming subscriptions, unlimited 3% cash back at U.S. gas stations, unlimited 3% cash back on transit including taxis/rideshare, parking, tolls, trains, buses and more and 1% cash back on all other purchases. Terms apply.
4X Membership Rewards points at Restaurants (plus takeout and delivery in the U.S.) and at U.S. supermarkets (on up to $25,000 per calendar year in purchases, then 1X), 3X points on flights booked directly with airlines or on amextravel.com, 1X points on all other purchases
Who's this for? The American Express Gold Card is geared toward consumers who want to earn a competitive rewards rate on everyday purchases while benefiting from high-end perks. Cardholders earn 4X Membership Rewards points at U.S. supermarkets and restaurants (on up to $25,000 per year in purchases, then 1X), which is one of the highest rates available. You can also earn 3X Membership Rewards points on travel booked through Amex.com or directly with the airline and 1X Membership Rewards points on all other purchases. The average American can earn $207 in cash back each year when they do their shopping at qualifying supermarkets. Terms apply.
Occasionally you can earn even more rewards at U.S. supermarkets with Amex Offers, as well as statement credits at select retailers. These limited-time offers are location-based and additional terms apply.
In addition to rewards and Amex Offers, cardmembers can also take advantage of an annual $120 dining credit ($10 a month) at Grubhub, The Cheesecake Factory, Goldbelly, Wine.com, Milk Bar and select Shake Shack locations (for those nights when you don't want to cook). Enrollment is required. Plus, there are no foreign transaction fees. (see rates and fees)
Who's this for? If you like to order your groceries online and want to earn travel rewards, then the Chase Sapphire Preferred may be for you. It offers the ability to earn 3X points on online grocery purchases (excluding Target, Walmart and wholesale clubs), along with 5X points on travel purchased through Chase Ultimate Rewards, 3X points on dining, 3X points on select streaming services and 2X points on all other travel purchases.
The card has a $95 annual fee but the benefits help to offset that cost. Cardholders get up to $15 back quarter on Instacart orders, along with six free months of Instacart+, which provides perks like no delivery fees on orders over $35 and reduced service fees. Other perks include up to $10 back each month on GoPuff orders, an up $50 annual Ultimate Rewards Hotel Credit and more.
Who's this for? If you find yourself primarily grocery shopping at Whole Foods or Amazon.com, then you should consider the Amazon Prime Rewards Visa Signature Card. Cardholders earn a high 5% back on those purchases, which is hard to beat. And unlike the two American Express cards on this list, there's no limit to how many points you can earn.
This card is also a decent choice for restaurant, gas and drug store purchases, which earn 2% back. You can redeem your points to make purchases on Amazon, for travel through the Chase Travel Center, or for cash or gift cards. Plus, upon approval for the card, you receive a $100 Amazon.com gift card, making it one of the few welcome bonuses that isn't connected with a certain spending requirement.
While this card has no annual fee, a Prime membership is required ($139 for an annual membership and $14.99 for a monthly membership). If you already have Prime, this card is a no-brainer, and if you're looking to try Prime, you can offset most of the first-year cost with the $100 gift card.
*0% introductory APR for 12 months on balance transfers made in the first 90 days after account opening. After that, the APR for the unpaid balance and any new balance transfers will be a non-variable rate of 17.99%. 3% balance transfer fee per transaction. Subject to credit approval. If you take advantage of this balance transfer, you will immediately be charged interest on all purchases made with your credit card unless you pay the entire account balance, including balance transfers, in full each month by the payment due date.
Who's this for? The PenFed Platinum Rewards Visa Signature Card is a good choice for shoppers who want big rewards (3X points for every $1 spent on supermarket purchases) without the annual fee. The average American can earn $155 in cash back each year when they do their shopping at qualifying supermarkets.
The card also earned a spot on our list of best credit cards for gas rewards thanks to its 5X points for every $1 spent when you fill up your tank. This is a smart choice for cardholders who want to maximize their rewards on everyday spending.
PenFed is a credit union, so membership is required to open a credit card. Anyone can join, but it takes a few extra steps. You need to apply, open a savings account with a $5 deposit and maintain a $5 account balance.
Who's this for? The Blue Cash Everyday Card from American Express is the no annual fee (see rates and fees) alternative to the Blue Cash Preferred Card from American Express, which tops our list of best cards for grocery shopping. Blue Cash Everyday Card members earn a competitive 3% cash back at U.S. supermarkets on up to $6,000 per year in purchases (then 1%). The average American can earn $155 in cash back each year when they do their shopping at qualifying supermarkets.
Cardmembers also earn 3% cash back at U.S. gas stations, (on up to $6,000 in purchases per year, then 1%) and 1% cash back on all other purchases. You can earn a $200 statement credit after you spend $2,000 in purchases on your new card within the first 6 months. Terms apply.
Beyond cash back, cardmembers can benefit from a low intro APR of 0% on purchases and balance transfers for the first 15 months from the date of account opening (then, 18.74%-29.74% variable APR; there's a balance transfer fee that's either $5 or 3% of the amount of each transfer, whichever is greater). (See rates and fees)
Like the Blue Cash Preferred Card, the Blue Cash Everyday Card comes with Amex Offers, which allow you to earn a statement credit or additional points at select retailers. These limited-time offers are location-based and additional terms apply.
Intro fee of either $5 or 3% of the amount of each transfer, whichever is greater, on transfers made within 60 days of account opening. After that, either $5 or 5% of the amount of each transfer, whichever is greater.
This card can help you maximize cashback in a variety of rotating categories. Cardholders earn 5% cash back on up to $1,500 in combined purchases in bonus categories each quarter you activate (then 1%) and 1% cash back on all other purchases. The cash-back calendar changes every quarter. (Learn more about how Chase classifies bonus category purchases.)
Beyond rewards, you can take advantage of no annual fee and a competitive no-interest period for the first 15 months from account opening on new purchases and balance transfers (after, 19.49% - 28.24% variable APR). There's an intro balance transfer fee of either $5 or 3% of the amount of each transfer, whichever is greater, on transfers made within 60 days of account opening. After that, it's either $5 or 5% of the amount of each transfer, whichever is greater.
Thanks to online grocery delivery services, you never have to leave your home to stock up on the basics. Plus, it's still possible to maximize your credit card rewards to pay for online grocery orders.
For example, cardholders with the Chase Sapphire Preferred card can earn 3X bonus points on all online grocery purchases. In addition to higher rewards rates, cardholders receive up to $15 in statement credits each quarter toward Instacart orders and six free months of Instacart+. This provides you with $0 delivery fees and reduced service fees on orders of $35 or more. Learn more at instacart.com/chase-sapphire.
Paying for everyday expenses like groceries with a credit card can help you build credit. However, in order to actually improve your credit score, you must remember to pay your bills on time and in full each month. 041b061a72