The Best 5 Credit Cards for Groceries

Last year my Chase credit card, with which I had earned 5% back on groceries and gas since 2007, suddenly changed. They switched to some sort of rotating-category-that-earns-more-points system that I didn't particularly care for. Every few months, I have to opt in all over again to take advantage of whatever category they're giving the most points for that month. Even though I do my best to keep up with credit card rewards, I don't take credit card reward hacking to the extreme. I'd prefer not to have to carry around 10 cards in my wallet.

Nevertheless, I do prefer to get the most points in categories that I actually spend a lot of money on. After our mortgage, the highest percentage of our monthly expenses comes in the form of groceries. We prefer organic and local food, which can be pricey. So, I set out to determine which credit cards actually give the highest percentage back on groceries. (See also: Best Credit Cards for Travel)

6% back at supermarkets3% back on gas and department stores1% back on everything else$75 annual fee

Note that the $75 fee for the Blue Cash Preferred card becomes worthwhile if you spend over $208/month on groceries. If you spent about $104/month, you'd recoup your costs — but you would have been better off with a no-fee 3% rewards card. Spending $208/month on groceries, you'd earn about $150 per year in rewards, so you'd have earned $75 above your initial investment. At $208/month with a 3% card, you would just break even on your annual fee, so anywhere above $208/month it becomes worth it to pay the fee. This doesn't take into account the additional gas cash back or anything else.

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5% off everything at Target$0 annual fee

If you shop at a SuperTarget for groceries, the Target RedCard gives you 5% off at everything you purchase at the register. This isn't just a grocery rewards credit card; the cardholder will receive the same discount on all Target purchases. If you have a Target nearby that also sells groceries, this is a great way to save 5% on food, as well as a variety of other department store purchases. Unfortunately, this card has no affiliation with any credit card payment network such as Visa or MasterCard, so you can’t use it outside of Target stores.

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3% back at supermarkets2% back on gas and department stores1% back on everything else$0 annual fee

The Blue Cash Everyday card is largely the same as the Blue Cash Preferred, but it has no annual fee and half the rewards across the board. Nevertheless, 3% cash back on groceries and 2% cash back at gas stations and department stores still represents a competitive rate of return. Finally, this is one of the few American Express cards offered without an annual fee.

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3% on gas2% on groceries1% on everything else$0 annual fee

With the exception of the extra cash back at department stores, the Cash Rewards Visa Signature card has a similar reward structure to the Blue Cash Everyday card from American Express. Cardholders can receive their cash-back rewards as a direct deposit in any checking or savings account, as a statement credit, or even as a payment towards a mortgage held by Bank of America. In fact, rewards redeemed into a Bank of America checking and savings accounts receive an additional 10% bonus. Unfortunately, the bonus percentages only apply to customer’s first $1,500 spent in each category each quarter.

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2% on groceries and gas1% on everything else$39 annual fee

This Capital One Cash Rewards offering brings up the rear of this list by offering only 2% cash back on gas and groceries, but don’t count it out. This card is offered to applicants with average credit, so it could be the ideal product for those who don’t qualify for other cards. Capital One also wins kudos for not charging foreign transaction fees on any of their cards. If you travel internationally, or just like to drive over the border for shopping, this card will save you some money over the other cards here.

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If you like credit card rewards programs, but have recently been unhappy with changes to your card, it may be time to consider a new one. The best way to choose a cash-back rewards card is to simply look at what your biggest category of spending is each month, and find a card that gives you the most cash back on that category. For me, this category was groceries.

What's your biggest category of spending each month? Do you earn extra credit card points for those cards?

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