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 $5,019 a year, or roughly $418 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 ($3,365 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 and other big name grocers.
CNBC Select analyzed 26 popular rewards cards using an average American's annual budget and digging 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 CNBC Select's top picks for credit cards offering supermarket rewards
6% cash back at U.S. supermarkets on up to $6,000 per year in purchases (then 1%), 6% cash back on select U.S. streaming subscriptions, 3% cash back at U.S. gas stations, 3% cash back on transit including taxis/rideshare, parking, tolls, trains, buses and more and 1% cash back on other purchases
$250 statement credit after you spend $1,000 on eligible purchases on your new Card within the first 3 months
0% APR for the first 12 months on purchases and balance transfers
14.49% to 25.49%
3%, $5 minimum
Who's this for? Frequent grocery shoppers will be happy to learn the Blue Cash Preferred® Card from American Express offers the highest cash-back rate at U.S. supermarkets at 6% (on up to $6,000 per year in purchases, then 1%). The average American can earn $301 in cash back each year when they do their shopping at qualifying supermarkets.
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.
Cardmembers can also take advantage of Amex Offers, where users earn a statement credit or additional cash back at select retailers. For example, a recent offer gave you $25 back each month (up to three times), if you spent $70 or more a month on Sun Basket meal kit delivery. These limited-time offers are location-based and additional terms apply.
This card does come with a $95 annual fee, but it can be offset by the cash back you earn and discounts you can get through the Amex Offers.
4X Membership Rewards® points at U.S. supermarkets and worldwide restaurants (on up to $25,000 per year in purchases, then 1X), 3X Membership Rewards® points on flights booked directly with airlines or on Amextravel.com, 1X Membership Rewards® points on all other purchases
35,000 Membership Rewards® Points after you spend $4,000 on eligible purchases with your new card within the first 3 months from account opening
See rates and fees
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 worldwide (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
Occasionally you can earn even more rewards at U.S. supermarkets with Amex Offers, as well as statement credits at select retailers. A recent offer from east coast-based Stew Leonards gave cardholders $5 back once you spend $50 of more. These limited-time offers are location-based and additional terms apply.
In addition to rewards and Amex Offers, cardmembers can also take advantage of a number of credits, including a $120 dining credit ($10 a month) at Grubhub, Seamless, The Cheesecake Factory, Ruth's Chris Steak House, Boxed and participating Shake Shack locations (for those nights when you don't want to cook). Plus, there are no foreign transaction fees, and there's an annual $100 airline fee credit to cover the cost of in-flight food and beverages, seat upgrades and baggage fees.
The Gold Card does have a $250 annual fee, but it can easily be offset by all the added card benefits. Take full advantage of the $120 dining credit and $100 airline fee credit, and the cost of the card effectively drops to $30.
5% cash back at Amazon.com and Whole Foods Market; 2% back at restaurants, gas stations and drugstores; 1% back on all other purchases
$70 Amazon.com gift card upon approval
$0, but a Prime membership is required ($119 for an annual, $12.99 for monthly)
15.99% to 23.99%
5%, $5 minimum
See our methodology, terms apply.
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 $70 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 ($119 for an annual membership and $12.99 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 $70 gift card.
*When we calculated the returns for the Amazon Prime Rewards Visa Signature Card, we assumed the cardholder would do 75% of their grocery shopping at Whole Foods Market; 25% of their clothing and housekeeping supplies shopping at Amazon. You may earn a higher or lower return depending on your spending habits.
5X points on gas, 3X points on supermarket purchases and 1X points on all other purchases
$100 statement credit when you spend $1,500 in first 90 days from account opening
0% APR for the first 12 months on balance transfers
11.74% to 17.99%
See our methodology, terms apply.
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 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.
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 select U.S. department stores and 1% cash back on other purchases
Earn $150 Back after you spend $1,000 in purchases on your new card in your first 3 months from account opening
0% APR for the first 15 months on purchases and balance transfers
14.49% to 25.49%
3%, $5 minimum
Who's this for? The Blue Cash Everyday® Card from American Express is the no annual fee alternative to the Blue Cash Preferred® Card from American Express, which tops our 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%).
Cardmembers also earn 2% cash back at U.S. gas stations and select U.S. department stores and 1% cash back on all other purchases. You can unlock a $150 welcome bonus if you spend $1,000 on eligible purchases within the first 3 months from account opening.
Beyond cash back, cardmembers can benefit from no interest on purchases or balance transfers for the first 15 months after account opening (then, 14.49% to 25.49% variable APR). There is a 3% (minimum $5) balance transfer fee.
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.
To determine which cards offer the best value for grocery shopping, CNBC Select analyzed 26 of the most popular credit cards offered by the biggest banks, financial companies and credit unions that allow anyone to join and offer bonus rewards at supermarkets. Bonus rewards means a cardholder earns 2% or 2 points per dollar in a given category. In this case, grocery stores.
We compared each card on a range of features, including cash-back rewards, welcome bonus, introductory and standard APR, balance transfer fee and foreign transaction fees, as well as factors such as required credit score and customer reviews when available. We also considered additional perks, the application process and how easy it is for the consumer to redeem points.
CNBC Select teamed up with location intelligence firm Esri. The company's data development team provided the most up-to-date and comprehensive consumer spending data based on the 2018 Consumer Expenditure Surveys from the Bureau of Labor Statistics. You can read more about their methodology here.
Esri's data team created a sample annual budget of approximately $21,852 in retail spending. This budget is comprised of the most common spending categories, including groceries ($5,019), gas ($2,394), dining out ($3,365), travel ($2,154), utilities ($4,959) and general purchases ($3,961). General purchases include items such as housekeeping supplies, clothing, personal care products, prescription drugs and vitamins, and other vehicle expenses.
CNBC Select used this budget to estimate how much the average consumer would save over the course of a year, two years and five years, assuming they would attempt to maximize their rewards potential by earning all welcome bonuses offered and using the card for all applicable purchases. All rewards total estimations are net the annual fee.
It's important to note the value of a point or mile varies from card to card and based on how you redeem them. When we calculated the estimated returns, we assumed that cardholders are redeeming points/miles for a typical maximum value of 1 cent per point or mile. (Extreme optimizers might be able to achieve more value.)
Our final picks are weighted heavily toward the highest five-year returns, since it's generally wise to hold onto a credit card for years. This method also avoids giving an unfair advantage to cards with large welcome bonuses.
For rates and fees of the Blue Cash Preferred® Card from American Express, please click here.
For rates and fees of the Blue Cash Everyday® Card from American Express, please click here.
For rates and fees of the American Express® Gold Card, please click here.