Store-brand and bank-issued credit cards have the potential to offer consumers great perks and savings on various expenses, including groceries. However, it can be challenging to determine when a specific credit card is worth it and how to choose the card that will provide the most significant savings.
Grocery rewards credit cards work on the premise that when you purchase food from qualifying retailers, you earn extra points or cash back, resulting in substantial savings over time. According to a recent LendingTree report, a family spending about $100 a week on groceries can accumulate over $300 in cash back within a year, depending on where they shop and the type of card they use.
Nevertheless, the potential for savings varies based on where you shop and what you buy. Certain types of cards do not offer rewards for grocery purchases made at some of the largest retailers in the U.S.
If you predominantly shop for groceries at one retailer, such as Target or Walmart, a store-brand credit card is a logical choice. On the other hand, if you spread your grocery shopping across multiple retailers, a bank-issued card would be more suitable.
When making a choice between store-brand and bank-issued cards, it is essential to consider your loyalty to specific brands and your spending habits. Both options have their pros and cons, and the right card depends on the specific details of the card and your preferences.
When selecting a grocery rewards credit card, consumers have a vast selection of over 90 cards to choose from. However, it is crucial to note that most cards have limitations on the types of groceries that earn rewards and the specific retailers where purchases are eligible.
For example, American Express Blue Cash Preferred cardholders do not earn rewards for groceries purchased at superstores, convenience stores, warehouse clubs, and meal-kit delivery services. To earn cash back, shoppers must shop at genuine supermarkets, which means popular warehouse stores like Costco and Walmart are excluded.
Store-brand cards prove more advantageous for individuals who exclusively shop at a single grocery store like Kroger or Target. By using store cards, such as the Target REDcard credit card, shoppers can enjoy a 5% discount on various goods, including groceries.
If you are not loyal to a particular retailer, LendingTree’s analysis suggests that American Express Blue Cash Preferred card and American Express Surpass Hilton Honors card offer the highest earnings, with 6% cash back on eligible purchases at U.S. supermarkets.
It is important to consider what you purchase and how you pay for it when using a grocery rewards credit card. Card issuers often exclude certain purchases, such as alcohol and tobacco, from earning rewards. Additionally, some cards may only offer rewards for online grocery purchases and not in-store transactions.
To make the most of these cards, it is crucial to understand the nuances and details of each card’s rewards program. Doing some research and thoroughly examining the card’s terms and conditions will ensure that you choose the right card based on your spending habits and maximize the rewards you receive.
In conclusion, store-brand and bank-issued credit cards can significantly benefit consumers by providing perks and savings on groceries. By considering factors such as loyalty to specific retailers, spending habits, and the details of the card’s rewards program, individuals can select the best credit card to maximize their savings.
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