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What's the Best Card for Groceries?


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It depends. 

 

How are you optimizing this spending category?

 

I've been using the American Express Blue Cash Preferred. 

 

This card pays 6% back on groceries, but you have to factor in the $95 annual fee and estimate your annual grocery spending to decide if this is a great grocery card for you.

 

Note that after $6,000 in annual grocery spending, category rewards go from 6% to 1%, so beyond $6,000 your return actually starts to decrease.  Also note that if you spend less than $132 a month you're actually losing money, as it takes that much grocery spending at 6% just to claw back the AF.  

 

Here is a table that shows net rewards for groceries at various spending levels.

 

E1TsEwM.png 

 

(This card also pays 3% back on gas, which adds almost no incremental value for us, but take your own gas spending into consideration as well.)

 

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The AF on my BCP just posted, so I'm going to downgrade this card and move my grocery spending to the US Bank Altitude Reserve (4.5% back on all Apple Pay purchases, which will cover ~95% of my grocery store spending).  Altitude has a $75 net AF that's already covered in other ways.

 

If I didn't already have the Altitude I'd switch our grocery spending to one of our Bank of America 3/2/1 (5.25/3.5/1.75) cards for 3.5% back on groceries (also capped). 

 

The enhanced rewards on the 3/2/1 cards comes from a relationship bonus, which has other financial requirements (which we meet with our free BoA household checking account and a collection of securities that have to be kept somewhere, so we keep them at Merrill - also for free).

 

For us, absent an upgrade or sign-up bonus on the BCP, both the US Bank (4.5%) and BoA (3.5%) cards are superior choices for groceries. 

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Won't the Altitude Reserve 4.5% using ApplePay surpass most rewards cards for almost all purchases that take Apple Pay, except the BofA 5.25% categories? Of course that presumes you want to be part of the Apple world. 

 

TL;DR: Altitude Reserve with Apple Pay is great at 4.5% nearly everywhere. Is there a high value card for Google Pay, Samsung Pay or other Android user? 

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Definitely not the best deal, but in case anyone else has the Chase United Gateway card, I found out by accident today that they are now paying 3x United miles on up to $1500 in groceries per month through September, 2021.  According to The Points Guy, that's 3.9%.

 

As far as I can tell, they didn't send me an announcement.  I found it by logging in and checking the "card benefits" just to remind myself.

 

That's an important lesson.  Cards you already have might run secret rewards boosts, so it pays to check the card benefits every once in a while.

 

[Edit] The Chase United Gateway card has no AF (or FTF for that matter).

Edited by nemo
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6 hours ago, swimmingwithsharks said:

Won't the Altitude Reserve 4.5% using ApplePay surpass most rewards cards for almost all purchases that take Apple Pay, except the BofA 5.25% categories? Of course that presumes you want to be part of the Apple world. 

 

The rotating 5% category cards would be the main exception, but you're pretty close.  I have very few opportunities to use Apple Pay anywhere but grocery stores, though.  
 

I was able to use it on a ~$2,500 auto repair at an independent mechanic a couple of years ago, which more than covered the net AF for the entire year.

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On 1/28/2021 at 12:06 PM, swimmingwithsharks said:

Won't the Altitude Reserve 4.5% using ApplePay surpass most rewards cards for almost all purchases that take Apple Pay, except the BofA 5.25% categories? Of course that presumes you want to be part of the Apple world. 

 

TL;DR: Altitude Reserve with Apple Pay is great at 4.5% nearly everywhere. Is there a high value card for Google Pay, Samsung Pay or other Android user? 

I'm going to have to look into this!!!  4.5% for using Apple Pay?  I'm literally getting an iPhone this summer for the first time after being an Android fanboy for at least 11 years.  I have to check into what types of places accept it.  Wow!

 

***Note to Self***

 

On first App Spree after mortgage:

1. Get Navy Federal card that has high limit.

2.  Get Navy Fed CLOC

3.  Get Citibank Double Cash

4.  Get Altitude Reserve 4.5%!!!

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On 1/28/2021 at 5:20 AM, cv91915 said:

It depends. 

 

How are you optimizing this spending category?

 

I've been using the American Express Blue Cash Preferred. 

 

This card pays 6% back on groceries, but you have to factor in the $95 annual fee and estimate your annual grocery spending to decide if this is a great grocery card for you.

 

Note that after $6,000 in annual grocery spending, category rewards go from 6% to 1%, so beyond $6,000 your return actually starts to decrease.  Also note that if you spend less than $132 a month you're actually losing money, as it takes that much grocery spending at 6% just to claw back the AF.  

 

Here is a table that shows net rewards for groceries at various spending levels.

 

E1TsEwM.png 

 

(This card also pays 3% back on gas, which adds almost no incremental value for us, but take your own gas spending into consideration as well.)

 

Sir (?) thank you so much for this! 

 

I never in a million years considered using different credit cards for different reasons.... I just wasn't there yet in my credit journey... And now that I'm knocking on the door... I was just going to get a good everyday spender... But now you've made me realize that there's cards that give Superior rewards for grocery.... For gas.. probably for a whole ton of other things.  I can probably analyze my spending to the top three or four things that I spend my money on... And just app for and use the cards associated with those specific spendings categories to maximize my spending power.

 

Oh my God this board is amazing!!! Thank you thank you thank you!!!

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10 hours ago, Journeyjeans said:

Sir (?) thank you so much for this! 

 

I never in a million years considered using different credit cards for different reasons.... I just wasn't there yet in my credit journey... And now that I'm knocking on the door... I was just going to get a good everyday spender... But now you've made me realize that there's cards that give Superior rewards for grocery.... For gas.. probably for a whole ton of other things.  I can probably analyze my spending to the top three or four things that I spend my money on... And just app for and use the cards associated with those specific spendings categories to maximize my spending power.

 

Oh my God this board is amazing!!! Thank you thank you thank you!!!


You should still get an everyday spender (flat 2% or more) for what we call "non-category spending," but yeah, that's basically the rewards card starter kit.  :) 

Rewards cards generally come with higher APRs, so they're comparatively awful choices in a sea of bad ones for carrying balances.

 

 


 

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