No Coupon Needed: Cut Grocery Bills With Credit Cards

Kimberly Palmer
By Kimberly Palmer 
Edited by Paul Soucy

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When Andrew Daniels shops for food for his family, which includes two young children, he adds as many discounts as he can on top of one another. After planning meals for the week, he heads to the grocery store, where he looks for marked-down items that freeze well, such as ground beef. Then, he uses a credit card that gives him 4% cash back.

“It really adds up, especially if you have a large family,” says Daniels, who blogs about saving money on his website, He estimates that with store discounts and credit card rewards, he saves at least 10% on his family’s grocery bill every week — and often closer to 20%.

Thanks to a boom in supermarket rewards from credit card issuers, it’s easier to spend less on your groceries.

The credit card “industry is so competitive, consumer reward rates are trending higher,” says Tom Dailey, a card payments consultant. Dailey says card issuers offer high rewards on everyday items like groceries in the hope of getting shoppers into a habit of using that card for all purchases.

In other words, this means there are ways to shop for food more strategically even if you're paying full price at checkout.

Here are five things you can do to take advantage of your credit cards and pay less for groceries:

Find a card with a high rewards rate for groceries. The Blue Cash Preferred® Card from American Express, for example, offers 6% cash back at U.S. supermarkets on up to $6,000 in spending, then 1% (terms apply — see rates and fees) However, that card has an annual fee: $0 intro annual fee for the first year, then $95. The $0-annual-fee version, the Blue Cash Everyday® Card from American Express, offers 3% cash back at U.S. supermarkets with the same $6,000 annual spending cap (terms apply — see rates and fees). The Bank of America® Customized Cash Rewards credit card offers 2% cash back at grocery stores, subject to a quarterly limit.

Use another card after you max out rewards on one card. After you hit a spending cap on a credit card bonus category, rewards typically drop to 1%. If that happens, shift grocery spending to a card with a flat cash-back rate above 1%. The Citi Double Cash® Card, for example, offers 1% cash back when you make purchases and another 1% when you pay them off. Multiple cards offer 1.5% cash back on purchases, including the Capital One Quicksilver Cash Rewards Credit Card.

Layer different rewards. Shoppers can come out ahead by “stacking” rewards. For example, if you opt in to the Uber Visa Local Offers program and earn, say, a 5% or 10% Uber credit after shopping at Whole Foods, and the credit card you use earns 1% back on grocery store purchases, then you’re walking away with 6% or 11%. Similarly, you can apply coupon codes as store discounts on top of cash-back rewards, as Daniels does.

Choose your grocery store carefully. Some grocery stores offer bigger discounts than others, and if you combine the right store with a rewards card, you can get even bigger savings. Susan Patrick, an engineer living in Palm Beach, Florida, says she shops for the three adults in her household primarily at Costco, where she can combine her executive membership rewards, at 2% cash back, with the rewards from her Costco Anywhere Visa® Card by Citi, which gives her another 2% cash back, for a total of 4%.

Pay attention to rotating categories. Some credit cards offer 5% cash back in rotating categories that you sign up for, which often include grocery spending. For example, the Discover it® Cash Back is offering 5% cash back at and Target, both of which sell food, in the fourth quarter of 2017. And grocery stores will be a 5% category in the second quarter of 2018. The 5% caps out at $1,500 in combined purchases for the quarter; after that, you earn 1%. Bonus categories must be activated quarterly to qualify for the higher rate.

Lydia Beiler, founder of and mother of four, says she uses her Chase Freedom®, which also offers 5% on rotating categories and usually has grocery stores as a category one quarter each year. Otherwise, she uses a flat-rate card, such as Capital One Spark Cash for Business, which offers 2% back on all purchases.

As long as you’re paying off the balance each month, you can enjoy the perks of credit card use, including rewards and fraud protection, while avoiding fees and interest payments. Stocking your fridge for less never tasted so good.

More from NerdWallet

To view rates and fees of the Blue Cash Preferred® Card from American Express, see this page. To view rates and fees of the Blue Cash Everyday® Card from American Express, see this page.

All information about the Capital One Spark Cash for Business has been collected independently by NerdWallet. The Capital One Spark Cash for Business is no longer available through NerdWallet.

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