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 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 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
Earn a $300 statement credit after you spend $3,000 in purchases on your new card within the first 6 months from account opening
$0 introductory annual fee for one year, then $95
0% for the first 12 months on purchases, N/A for balance transfers
13.99% to 23.99% variable
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 $310 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 (waived in the first year), but it can be offset by the cash back you earn and discounts you can get through the Amex Offers.
4X Membership Rewards® points on restaurants worldwide (including takeout and delivery, plus, Uber Eats purchases) 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
60,000 Membership Rewards® points after you spend $4,000 on eligible purchases within the first 6 months from account opening
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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. The average American can earn $207 in cash back each year when they do their shopping at qualifying supermarkets.
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 $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.
The Gold Card does have a $250 annual fee, but it can be reduced to effectively $130 if you take advantage of the $120 dining credit each year.
5% cash back at Amazon.com and Whole Foods Market; 2% back at restaurants, gas stations and drugstores; 1% back on all other purchases
$100 Amazon.com gift card upon approval
$0 (but Prime membership is required)
14.24% to 22.24% variable
5%, $5 minimum
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. The average American can earn $207* in cash back each year when they do their shopping at qualifying supermarkets.
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 ($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 $100 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 groceries, 1X points on all other purchases
$100 statement credit when you spend $1,500 in the first 90 days from account opening
0% promotional rate for the first 12 months on balance transfers
13.49% to 17.99% variable on purchases; 17.99% non-variable on balance transfers
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.
3% cash back at U.S. supermarkets (up to $6,000 per year in purchases, then 1%), 2% cash back at U.S. gas stations and select U.S. department stores, 1% cash back on other purchases
Earn $200 back after you spend $1,000 in purchases on your new card in your first 3 months from account opening
0% for the first 15 months on purchases, N/A for balance transfers
13.99% to 23.99% variable
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 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 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 $200 welcome bonus after spending $1,000 in eligible purchases on their new card within the first three months from account opening.
Beyond cash back, cardmembers can benefit from no interest on purchases for the first 15 months after account opening (then, 13.99% to 23.99% variable APR).
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.
Earn 5% cash back on up to $1,500 in combined purchases in bonus categories each quarter you activate (then 1%), 5% cash back on travel booked through the Chase Ultimate Rewards®, 3% cash back on dining and at drug stores, 1% cash back on all other purchases
$200 cash back after you spend $500 on purchases in your first three months from account opening
0% for the first 15 months on purchases
14.99% to 23.74% variable
Either $5 or 5% of the amount of each transfer, whichever is greater
Who's this for? The Chase Freedom Flex℠ has a robust welcome bonus: Earn $200 cash back after you spend $500 on purchases in your first three months from account opening. That's like earning 40% back.
This card can help you maximize cash back 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 and currently includes wholesale clubs*, cable, internet, and phone services and select streaming services** (Learn more about how Chase classifies bonus category purchases.)
In addition to rotating rewards 5% cash back on travel booked through the Chase Ultimate Rewards® portal, 3% cash back on dining and at drug stores and 1% cash back on all other 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 purchases (then 14.99% to 23.74% variable APR).
The Freedom card also provides cell phone protection and select partner benefits, such as 5% cash back on Lyft purchases through March 2022 and complimentary three months of DashPass, plus 50% off for the next nine months when you activate by December 31, 2021. This perk provides you with free delivery on DoorDash orders over $12 and lower service fees.
**Eligible streaming services include: Disney+, Hulu, ESPN+, Netflix, Sling, Vudu, Fubo TV, Apple Music, SiriusXM, Pandora, Spotify and YouTube TV.
Don't miss: 11 tips for saving money at the grocery store
Picking the best grocery credit card for your spending depends a lot on how you prefer to shop. Are you someone who grocery shops in-person or do you buy online and have your groceries delivered?
If it’s the latter, you’ll probably be best off with the Amazon Prime Rewards Visa Signature Card, which offers 5% cash back at Amazon.com, plus grocery delivery services through Prime Now, Amazon Fresh and Whole Foods.
If you like to visit the supermarket, do you have a preference of which store you go to? Grocery rewards credit cards usually exclude wholesale clubs such as Costco and BJ’s and big box stores like Target and Walmart. If these are your go-to places, you may be better off applying for their store credit cards.
To help you choose a generic grocery credit card, take a look at the reward rates and associated costs. While the best grocery rewards cards offer up to 6% cash back at supermarkets, many come with annual fees. The Blue Cash Everyday® Card from American Express has no annual fee, making it a smart choice if you’re cash-strapped and every dollar counts.
Learn more: 11 tips for saving money at the grocery store
As Americans spend more than $5,000 a year on grocery shopping, a credit card that rewards you for your supermarket purchases is a smart addition to just about anyone’s wallet.
Major card issuers, such as American Express, allow you to see if you prequalify online. To check your approval odds for one of these credit cards, apply for prequalification through the card issuer’s website where it’s easy, convenient and free to do so. It’s also important you check your credit score when you start searching for a new card.
Thanks to online grocery delivery services, you never have to leave your home to stock up on the basics.
As the coronavirus pandemic has caused millions of consumers to shelter in place, many are learning how to maximize their credit card rewards to pay for their online grocery orders.
For example, cardholders with the Chase Sapphire Reserve® and the Chase Sapphire Preferred® cards can earn 5X and 3X bonus points, respectively, on all Instacart delivery and pickup orders, up to $3,000 in spending, through Sept. 30, 2020. In addition to higher rewards rates, cardholders receive up to $50 in statement credits toward an annual or monthly Instacart Express membership ($99 and $9.99, respectively). This provides you with $0 delivery fees and reduced service fees on orders of $35 or more. Learn more at instacart.com/chase-sapphire.
For American Express cardholders who earn rewards for their grocery purchases, food delivery services like Instacart and FreshDirect fall under the “groceries” or “supermarkets” categories. Sign up for one of the below Amex cards to earn rewards on your grocery deliveries:
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 2019 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 $22,126 in retail spending. The budget includes six main categories: groceries ($5,174), gas ($2,218), dining out ($3,675), travel ($2,244), utilities ($4,862) and general purchases ($3,953). 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.
Information about the Amex EveryDay® Preferred Credit Card has been collected independently by CNBC and has not been reviewed or provided by the issuer prior to publication.
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.