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Changes in grocery spending are the biggest shifts in consumer behavior that we've seen during the coronavirus pandemic. Along with an uptick in online grocery deliveries, there has been an increase in grocery spending relative to other purchases. Credit card issuers have responded to these changing spending patterns, with temporary grocery bonuses and statement credits.
For those of us with an arsenal of cards to choose from – especially with so many new grocery bonuses recently announced – it can be a bit overwhelming to figure out which card to use for grocery spending right now. It's time to break down these bonuses.
Cards that provide the most value now
With credit card companies scrambling to remain top-of-mind for cardholders, consumers like us can benefit when it comes to essential items like groceries. For instance, instead of sockdrawering that premium travel card (or canceling it), card issuers would rather you use it to buy the basics.
Using TPG's points valuations as a guide, here are my top picks for the best cards to use on groceries right now. In terms of criteria, this list includes cards that offer the following:
- A temporary or permanent grocery bonus and the dates its valid for
- At minimum, a return of six cents per dollar spent
- A mix of cash back, a card rewards currency, or specific travel points
Several cards that deserve an honorable mention but are not in my top picks include:
- Most Delta co-branded cards: 4x Delta SkyMiles through July 2020
- Most Marriott co-branded cards: 6x Marriott Bonvoy points
The cards I'm personally using
Decisions, decisions. In a normal world, the Amex Gold has typically been my go-to grocery option. However, things have changed now with temporary bonuses.
I personally have four cards on this list including the Chase Freedom, Amex Gold, Hilton Aspire, and Chase Sapphire Preferred. The Sapphire Preferred gets immediately nixed because I can earn 5x Ultimate Rewards points on groceries this quarter with the Chase Freedom.
The interesting wrinkle in all of this is the Hilton Aspire card, with an impressive 12x points per dollar. While I usually would not use this card on groceries, the temporary bonus now makes for an interesting value proposition. I am not a huge hotel guy, but the Hilton Diamond status that comes with my Aspire card sometimes sways me towards being brand loyal.
I am hopeful for future travel plans in 2021 (including a dream trip to South America and Patagonia), and padding my Hilton points balance doesn't hurt for when that time comes. Here's how I plan to divide out my grocery spending:
- Now through June 30, I'll use a blend of my Hilton Aspire and Chase Freedom
- From July 1 through July 31, I'll exclusively use the Hilton Aspire
- From Aug. 1, I'll go back to my regular habit of buying groceries at U.S. supermarkets with the Amex Gold
What counts as a grocery store?
Each credit card issuer "codes" your purchase under a certain category, and not all of your grocery store trips will be coded as such.
Chase and Amex don't count warehouse clubs
For instance, none of the cards above will count warehouse clubs (Costco, Sam's Club, B.J.'s) as grocery stores. However, the exception to this are grocery delivery services like Instacart. If you use these services to order items from warehouse clubs, your purchases should be categorized as groceries.
Some Chase cards now include Target and Walmart
As noted above, superstores like Target and Walmart are usually ineligible for grocery store category bonuses. However, the above-mentioned Chase cards will code these merchants as grocery stores, as long as they have a dedicated grocery section. The Chase Freedom, which has a 5x category bonus this quarter on groceries, does not include superstores in that category.
Bottom line
Before deciding which card to use for groceries, it's important to think about what rewards you value right now during this pandemic.
Do you feel optimistic about the future of travel (like we do here at TPG) and want to collect more points with a specific travel company? Or would you rather earn transferable credit card points that offer flexible redemption options (my personal choice)? Finally, straight cash back is another viable alternative, given the current environment.
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