Best Credit Cards for Groceries in 2024
Expert Advice For Finding the Right Card
Sampath Kumar, Ph.D. — Professor of Marketing for the Austin E. Cofrin School of Business at UW-Green Bay
How do co-branded credit cards from Target, Sam’s Club or Home Depot work at stores outside of the chains in question?
Outside the partnered store, the card functions based on the rules and benefits of the network to which it belongs (Visa, Mastercard, etc.). This includes things like interest rates, fraud protection and global acceptance. But outside the specific store they’re partnered with, these cards typically don’t offer the additional benefits you might get when using them at the partnered store. This could include things like increased reward points and cash back. Co-branded cards often offer bonus rewards when used at a specific store (e.g., 5% back at Target). This benefit usually doesn’t apply outside those stores.
While you might not receive the boosted rewards specific to the partnered store, you could still earn standard rewards associated with the card network (e.g., 1% cashback on all purchases).
Some co-branded cards offer special discounts on specific items or categories within the partnered store. These discounts won’t be available at other stores. Thus, many customers find that outside the given network, they are better off using other rewards cards. They use store cards mostly within the stores.
How do rewards work when someone uses a grocery credit card to shop for groceries outside the US?
This depends on the card-issuing bank and network. Many cards charge foreign transaction fees (FTFs) for purchases made outside the US, typically a percentage of the transaction amount. These fees can significantly reduce the value of any rewards earned. If your card’s program explicitly states it earns rewards for all purchases, including international transactions, you’ll likely earn the usual rewards rate (e.g., 2% cashback on groceries) even for groceries bought outside the US.
Some cards might offer rewards for groceries but specifically exclude international purchases from earning rewards. In this case, you won’t earn any rewards for groceries bought outside the US, even if the store is categorized as a grocery store.
Not all grocery credit cards offer rewards specifically for grocery purchases. Regardless of category, they might offer a flat cashback rate on all purchases. In this case, you would earn the standard rewards rate for your grocery purchase outside the US, but it wouldn’t be any different from using the card for any other purchase.
What works better with grocery cards — cash back or reward points?
The main benefits of grocery cards are in-network discounts at grocery stores, specials for cardholders, mailers with coupons, etc. Choosing between cash back and reward points on grocery cards depends on your spending habits and preferences. Cashback offers simplicity, flexibility, and predictability, but the earning rate may be lower compared to point-based cards. On the other hand, reward points provide higher potential rewards, redemption flexibility, and sometimes travel benefits. Still, they can be more complex to understand and may come with limited flexibility and fluctuating point values.
Reward points are often associated with cross-promotion. For example, Piggly Wiggly partners with Shell stations to offer fuel points on grocery purchases. Customers can redeem these points for discounts on gasoline at participating Shell stations. Since this is offered in partnership with gas stations, you get double discounts from two stores compared to a straightforward cashback card. However, your rewards are limited to Shell gas stations, and you may have to travel additional distances to find one. Also, if the gas station prices are already high, the additional discount may amount to nothing. So, one has to very carefully examine the features before making a decision.
