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If you’re not reaping extra helpings of credit card rewards for every restaurant meal you pay for, you’re probably using the wrong credit card.
Americans are dining out more than ever. Average annual household spending on food away from home increased 28% from 2013 to 2017, according to the Bureau of Labor Statistics.
Both new and existing credit cards are following the dining trend. They’re offering beefed-up cash back, points and frequent flyer miles for restaurant spending, from McDonald’s to Michelin-starred chophouses.
Some cards offer the equivalent of 4% or 5% off each restaurant tab, although 3% is more common. A rewards card that pays 3% back returns a cool $144 a year in free money for four-person households that spend the U.S. average on dining out, $400 per month.
Here’s what to know about dining-out credit cards, a must-have for those who hand their plastic to waiters more often than they do to supermarket checkout clerks.
Use 3% back as a benchmark
The most lucrative dining-out cards offer the equivalent of 3% or more in rewards for restaurant spending. If it’s your go-to card for all kinds of expenses, make sure it has relevant perks and rewards beyond dining.
Look in new, old places
Some of the best products for dining out are upgraded older cards, and they come with very different annual fees.
The American Express® Gold Card, revamped in October 2018, offers 4 points per dollar spent at restaurants worldwide among its perks and rewards. Terms apply. Annual fee: $250.
Citi relaunched its luxury card, the Citi Prestige® Card, in January 2019 with 5 points per dollar spent at restaurants. Annual fee: $495.
The Capital One® Savor® Cash Rewards Credit Card is specifically geared toward dining out. It awards 4% cash back on dining, among other rewards and perks; it also carries an annual fee.
The Wells Fargo Propel American Express® card was relaunched in summer 2018 and includes among its rewards 3 points per $1 spent on dining out. Annual fee: $0.
Look in unusual places
Warehouse-club shopping doesn't seem to have much to do with dining out, but a few of the best dining cards come from Costco and Sam’s Club.
Cards by Costco and Sam's Club each offer 3 points per dollar spent on restaurants, as do cards from AARP and PayPal.
Check your travel cards
If you have a credit card geared to travel, it might already offer outsize points for restaurant spending. The main credit cards for American Airlines and United Airlines this year added dining as a category of spending that yields 2 frequent flyer miles per dollar spent instead of the usual 1 mile.
And dining out is a popular category for general travel cards such as the Chase Sapphire Reserve®, a luxury card where you can get an effective rewards rate of 4.5% on dining when using the points to buy travel — but you'll also pay an annual fee of $550.
Use quarterly cards part time
A few of the most popular no-fee cash-back cards offer 5% back on spending categories that change every three months. Restaurants are often a featured category, making quarterly cards ideal for using part of the year.
Watch for spending caps
Some cards limit restaurant spending that earns accelerated points or cash back. If you’re a heavy restaurant spender, you might blow through those caps and be bumped down to a lower earning level for your dining-out tabs.
Know what ‘dining out’ means
Amped-up credit card rewards for dining out will be determined by the restaurant’s merchant category code. The code identifies what type of business it is, and credit card issuers use the codes to determine whether the food you bought qualifies as dining out. Typically, it’s what you would expect, including carry-out, delivery, fast food, fast-casual, bars and fine dining restaurants. However, some cards will offer high rewards for just a segment of those — fast-food restaurants only, for example.
Be aware that money spent on a meal at a hotel bar might not count if it’s classified as a hotel expenditure instead of a restaurant. And meal ingredient kits — think Blue Apron — may seem like food delivery but might count as groceries.
Of course, credit cards may not work for everyone. But if you regularly use them, and you’re the type who considers an oven just an extra kitchen storage cabinet, you probably need a credit card that specializes in dining rewards.