January is a popular time to make New Year's resolutions, and nearly half of Americans (44%) have financial goals for 2020, according to a new CreditWise from Capital One Financial Milestones survey. Of those surveyed who have a financial resolution, 71% are planning to save more money and 34% are planning to pay off debt.
To save more money, half (51%) of respondents are planning to eat out less, cancel unnecessary subscriptions (47%) and cable (40%) and pack their lunch (21%).
However, there's a way to save money on these expenses without skipping takeout from your favorite restaurant or denying yourself the pleasure of watching the latest Netflix series: pay with a credit card. The best credit cards can save you hundreds on dining out and restaurants, streaming subscriptions, groceries and other common spending categories.
Below, Select explains how a credit card can help you save money, so you don't have to cut back on the things you enjoy.
How to save money by using a credit card
A credit card is a great asset that lets you earn rewards on all your spending. The average American can earn over $2,000 in rewards by using a credit card for everyday purchases such as food, gas, groceries and entertainment.
Select used a sample annual budget of approximately $21,852, provided by location intelligence firm Esri. This budget breaks down 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), which we used to calculate roughly how much money you can save over the course of a year and five years by using a credit card.
We looked at the categories Americans said they plan on cutting back on during 2020 (restaurants and subscriptions/entertainment) and chose the best credit cards that can earn you substantial cash back or rewards. The best part is that you don't have to limit when you dine out, how many subscriptions you have or cancel cable to earn these rewards — simply put those charges on a credit card and see the rewards add up.
Of course, in order to reap the most rewards, always pay your bill on time and in full. Plus avoid overspending just to earn rewards since any cash back, points or miles you earn will be negated by the amount you owe in interest and fees.
Here are some of the best credit cards for dining out, subscriptions and entertainment.
Restaurants
American Express® Gold Card
Rewards
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
Welcome bonus
Earn 60,000 Membership Rewards® points after you spend $6,000 on eligible purchases with your new Card within the first 6 months of Card Membership.
Annual fee
$250
Intro APR
Not applicable
Regular APR
See Pay Over Time APR
Balance transfer fee
N/A
Foreign transaction fee
None
Credit needed
Excellent/Good
See rates and fees and our methodology, terms apply.
Read our American Express® Gold Card review.
Pros
- Up to $120 dining credit annually ($10 a month) for purchases made with Grubhub, Goldbelly and other eligible restaurants (after a one-time enrollment)
- Up to $120 Uber Cash annually ($10 a month) for U.S. Uber Eats orders and U.S. Uber rides (card must be added to Uber app to receive the Uber Cash benefit)
- Strong rewards program with 4X points earned at restaurants and 3X points earned on flights booked directly with airlines or amextravel.com
- Baggage insurance plan covers up to $1,250 for carry-on baggage and up to $500 for checked baggage that is damaged, lost or stolen
- No fee charged on purchases made outside the U.S.
Cons
- No introductory APR period
- $250 annual fee
- Estimated rewards earned after 1 year: $1,074
- Estimated rewards earned after 5 years: $2,969
Rewards totals incorporate the points earned from the welcome bonus
Capital One Savor Cash Rewards Credit Card
Rewards
4% cash back on dining and entertainment, 4% on eligible streaming services, 3% at grocery stores and 1% on all other purchases
Welcome bonus
Earn a one-time $300 cash bonus once you spend $3,000 on purchases within the first three months from account opening
Annual fee
$95
Intro APR
None
Regular APR
21.24% - 29.24% variable
Balance transfer fee
3% for promotional APR offers; none for balances transferred at regular APR
Foreign transaction fee
None
Credit needed
Excellent/Good
See our methodology, terms apply.
Pros
- Unlimited 4% cash back on entertainment purchases
- Ability to redeem rewards at any amount, unlike some other cards with $25 minimums
- No fee charged on purchases made outside the U.S.
Cons
- $95 annual fee
- No introductory 0% financing offers for purchases or balance transfers
Streaming subscriptions
Blue Cash Preferred® Card from American Express
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. Cash Back is received in the form of Reward Dollars that can be redeemed as a statement credit.
Welcome bonus
Earn a $250 statement credit after you spend $3,000 in purchases on your new card within the first 6 months.
Annual fee
$0 intro annual fee for the first year, then $95.
Intro APR
0% for 12 months on purchases from the date of account opening
Regular APR
19.24% - 29.99% variable. Variable APRs will not exceed 29.99%.
Balance transfer fee
Either $5 or 3% of the amount of each transfer, whichever is greater.
Foreign transaction fee
2.7%
Credit needed
Excellent/Good
See rates and fees and our methodology, terms apply.
Pros
- High 6% cash back at U.S. supermarket spending (up to $6,000 a year, then 1%)
- Unlimited 6% cash back on select U.S. streaming subscriptions
- Unlimited 3% cash back at U.S. gas stations and on transit
Cons
- 2.7% fee on purchases made abroad
- Estimated rewards earned after 1 year: $679
- Estimated rewards earned after 5 years: $2,397
Rewards totals incorporate the cash back earned from the welcome bonus
Entertainment
U.S. Bank Cash+® Visa Signature® Card
Rewards
5% cash back on your first $2,000 in combined eligible purchases each quarter on two categories you choose, 5% cash back on prepaid air, hotel and car reservations booked directly in the Rewards Travel Center, 2% cash back on one everyday category, like gas stations/EV charging stations, grocery stores or restaurants, 1% cash back on all other eligible purchases
Welcome bonus
$200 bonus after spending $1,000 in eligible purchases within the first 120 days of account opening
Annual fee
$0
Intro APR
0% for the first 15 billing cycles on purchases and balances transferred within 60 days from account opening
Regular APR
19.49% - 29.74% (Variable)
Balance transfer fee
3%, minimum $5
Foreign transaction fee
3%
Credit needed
Good/Excellent
See rates and fees and our methodology, terms apply.
Pros
- No annual fee
- High 5% cash back on select purchases, when you activate bonus categories
- Low spending required to earn a good welcome bonus
Cons
- 5% cash back is limited to $2,000 in combined purchases each quarter
- Activation is required to earn 5% cash back
- 3% foreign transaction fee
- Estimated rewards earned after 1 year: $478
- Estimated rewards earned after 5 years: $1,790
Rewards totals incorporate the points earned from the welcome bonus
Capital One SavorOne Cash Rewards Credit Card
Rewards
Earn 10% cash back on purchases made through Uber & Uber Eats, plus complimentary Uber One membership statement credits through 11/14/2024, 8% cash back on Capital One Entertainment purchases, earn unlimited 5% cash back on hotels and rental cars booked through Capital One Travel; Terms apply, 3% cash back on dining and at grocery stores (excluding superstores like Walmart® and Target®), 3% cash back on popular streaming services and entertainment, and 1% cash back on all other purchases
Welcome bonus
Earn a one-time $200 cash bonus after you spend $500 on purchases within the first 3 months from account opening
Annual fee
$0
Intro APR
0% intro APR on purchases and balance transfers for 15 months
Regular APR
19.99% - 29.99% variable
Balance transfer fee
3% for the first 15 months or at a promotional APR that Capital One may offer you at any other time. No fee for amounts transferred at the Transfer APR
Foreign transaction fee
None
Credit needed
Excellent/Good
See rates and fees. See our methodology, terms apply.
Pros
- 3% cash back on dining and entertainment purchases
- Ability to redeem rewards at any amount, unlike some other cards with $25 minimums
- Competitive special financing offer on both new purchases and balance transfers
- No fee charged on purchases made outside the U.S.
Cons
- 3% balance transfer fee on the amounts transferred within the first 15 months
Our methodology
To determine which credit cards offer the best value, Select analyzed 234 of the most popular credit cards available in the U.S. We compared each card on a range of features, including rewards, welcome bonus, introductory and standard APR, balance transfer fee and foreign transaction fees, as well as factors such as required credit and customer reviews when available. We also considered additional perks, the application process and how easy it is for the consumer to redeem points.
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.
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.
While the five-year estimates we've included are derived from a budget similar to the average American's spending, you may earn a higher or lower return depending on your shopping habits.
For rates and fees of the Blue Cash Preferred® Card from American Express, please click here.
For rates and fees of the American Express® Gold Card, please click here.
