Use your credit card to save money on groceries with 3 easy tips (2024)

In recent years, many Americans have found that their dollars aren’t going quite as far at the grocery store.

Prices on staples like bread, eggs, and meat have continued to increase—prompted by a rising inflation rate and supply-chain disruptions in the aftermath of the COVID-19 pandemic. Many consumers are feeling the strain and are on the hunt for ways to cover their grocery bill without stretching their budgets too thin.

How much are Americans spending at checkout?

A lot more than they were at this time last year. According to the latest report released by the U.S. Bureau of Labor Statistics, which measures how much shoppers are paying for goods month over month, grocery prices are up 12.4% over the past 12 months.

With food prices increasing alongside other essentials like energy and rent, it’s important to trim costs where you can.

How can a credit card help you save on your grocery bill?

While credit cards are more popular than cash, most consumers still reach for their debit card as a primary payment method in their everyday lives. According to the 2021 Diary of Consumer Payment Choice report, credit card payments accounted for just 27% of payments in 2020. However, experts suggest that opting for a different payment option at the grocery store could be a huge financial misstep.

"Even just using a rewards credit card selectively for a category such as groceries can get you hundreds of dollars a year in cash back,” says Ted Rossman, senior industry analyst at Bankrate. "This is one of most families' largest spending categories, so if you're using a debit card or cash and not earning rewards, you're missing out.”

Paying with plastic can translate to major savings on your food bill that you could put toward other expenses or into your savings account for a rainy day. Here’s how to take advantage of those benefits:

1. Use a rewards or cash-back credit card for your purchases

Many credit cards offer rewards in the form of cash back, miles, or points that can then be redeemed for statement credits, cash, and other perks. There are a number of cards that offer cash back and rewards specifically for grocery purchases.

“Paying with a rewards credit card is a great inflation-busting strategy,” says Rossman. There’s the $0 annual-fee Citi Custom Cash® Card, which offers 5% cash back on purchases in your top eligible spend category each billing cycle, up to the first $500 spent (then 1% cash back thereafter).

Other noteworthy picks: The Capital One SavorOne Cash Rewards Credit Card, which boasts an unlimited 3% cash back on dining, entertainment, popular streaming services, and at grocery stores (excluding superstores like Walmart® and Target®). And then there’s the Instacart Mastercard® that offers 5% cash back on Instacart app and Instacart.com purchases—in addition to a free year of Instacart+ and a $100 Instacart credit automatically upon approval. (Membership auto-renews and terms apply.).

When selecting a new credit card, make sure to read the fine print and choose one that offers a high cash back or points rate and charges a low (or no) annual fee.

2. Take advantage of rotating categories and intro offers

While some credit cards offer you cash back on certain categories year-round, others may offer you a higher cash-back rate on certain purchases for a limited time. The Chase Freedom Flex℠ has $0 annual fee and offers lucrative cash back opportunities, such as 5% cash back on activated bonus category purchases each quarter (up to $1,500 in purchases, then 1%).

3. Shop around for merchant-specific discounts

Many issuers offer card-linked discounts when you make a qualifying purchase at a participating merchant. This can be a great way to rake in extra savings on purchases you already plan to make.

You’ll need to manually activate these offers by logging into your account on your card issuer’s website or app and selecting the offers you want to link to your card. Many major credit card issuers, including American Express, Chase, and Bank of America, offer merchant-specific discounts.

“Read those offer emails that your credit card carrier sends, because your carrier may offer exclusive savings at a specific grocery retailer,” says Trae Bodge, shopping expert at truetrae.com. “These promotions are temporary, but they can mean big savings that month.”

Pros and cons of using a credit card at the grocery store

Beyond selecting the right card, it’s important to understand how your card’s rewards work in order to fully reap the benefits. It’s equally important to use your card responsibly to avoid potentially damaging your credit score or paying high interest charges.

Pros:

Your credit card may offer more security

All four major credit card networks (Visa, Mastercard, Discover, and American Express) offer zero fraud liability, which protects you against fraudulent charges if your card is lost or stolen. This is a useful safety net in the event a fraudster gets a hold of your card number and makes unauthorized purchases.

Many debit cards may also offer zero fraud liability, but if someone gets their hands on your debit card information, they could drain your bank account before you notice, and it can take a while to get your money back.

It’s an easy way to build credit

There are many factors that make up your credit score, and one piece is your payment history. Using a credit card to buy your groceries and then making your monthly payments on time can help you build a strong credit history and show future lenders that you can manage your credit responsibly.

Cons:

You could face steep interest charges

If you can’t pay off your credit card balance in full each month, you could incur hefty interest charges. “With inflation as high as it is, debt is so expensive that any savings you earn with your credit card will be essentially negated by the balance you are carrying,” says Bodge.

Be sure to limit your spending to what you can comfortably afford to pay back before your payment is due. You can avoid paying extra by paying off your entire balance by the statement due date.

If you’re unable to pay off the entire balance, you should make sure to pay the minimum payment due—preferably a little more if you can afford it—to avoid late fees, a penalty APR, and damage to your credit. You can make this easier by automating your monthly credit card payments so that you never forget to pay your bill.

It can lead to overspending

Credit cards give you access to additional funds and allow you to spread out purchases over time, so you might be tempted to throw a few extra items in your cart and spend more than you can pay off. Aim to keep your spending in check by creating a shopping list and a monthly grocery budget that you stick to when you go to the store. That way, you won’t have to scramble to pay off your balance when your bill arrives.

Fortune Recommends™ has partnered with CardRatings for our coverage of credit card products. Fortune Recommends™ and CardRatings may receive a commission from card issuers.