One of the most effective ways to build up or repair your credit: grocery shopping. Even if you have no interest in using a credit card for anything else, using it to buy your groceries is a proven, efficient means of establishing a strong track record that can make your life a little easier the next time you want to take out a loan or buy a new car.
But, use the wrong card and you’re looking at an uphill climb to that 700+ credit score. We’re talking about a moderate weekly expense, not occasional big ticket purchases, so we need to pick out a card that’s suited to your grocery spending routine and budget. Now what does that mean? What needs to be prioritized for a grocery shopping credit card?
- Low interest and annual fees
- Decent rewards, and…
- Flexibility
Our pick for a great credit card that hits all three of these points:
American Express: Blue Cash Preferred
$200 statement credit on first $1,000 spent
Right off the bat, something that we love about this card is the two hundred dollars in statement credit if you spend one thousand dollars in the first three months of being issued the card. Statement credit is an amount that your creditor owes you, so that’s essentially twenty percent of your first thousand spent put right back in your pocket, less fees and interest.
That’s a fairly generous reward, and it’s not a difficult one to earn. Even if you’re a light grocery shopper, it’s a solid excuse to buy some of your long-shelf-life staples in bulk, like rice, canned goods and so on.
6% cash back at most US grocery stores
For your first six thousand dollars spent each year, you get six percent cash back at most US grocery stores. There are a few exceptions here. Specialty food stores don’t count, and neither do warehouse clubs like Costco, corner stores, or superstores like Wal-Mart. For all of these, you’ll be looking at one percent cash back.
But, a three percent cash back reward is applied at most US gas stations, and you get one percent cash back for all purchases anywhere, no matter what.
$95 annual fee
The ninety-five dollar annual fee is higher than some competing cards and lower than others, but easy to earn back with that two hundred dollar reward you earn in your first three months. Not a lot of cards can make that boast.
0% APR for first twelve months
For your first year with the card you’ll get to enjoy a zero percent APR. After the first twelve months, your APR will go up to anywhere from 15.24% to 26.24%, depending on your creditworthiness and a number of other factors. Unfortunately, these factors are to be determined at the time you were issued the card, so you can’t really hope to use the card to improve your score… and then enjoy the benefits on that very card right away.
Other fees
You can find a full list of fees, charges, terms and conditions right here at American Express’ official website, but we’ll run down the ones you need to know if you’re considering signing up for this card:
- 0% APR for balance transfers for the first twelve months on requests made within the first sixty days
- 15.24% to 26.24% APR on balance transfers made after that period
- 27.49% APR for cash advances, to vary based on Prime Rate
- A 29.99% penalty APR is applied for six months in response to late payments or returned payments by the bank, although, creditworthiness is a factor in whether the penalty is applied
- Balance transfers will run you five dollars or three percent per transfer, whichever amount is greater, and this fee will also be applied to cash advances on top of the APR
- Penalty fees for late and returned payments are $38, but there is no extra fee for overlimit
Overall, Blue Cash Preferred is a great card, and one of our favorites for grocery shopping. On the downside, the APR can get a bit steep if you have poor credit, and late payment penalties can be costly. But overall, for a responsible shopper, someone who is serious about getting their score up, it’s hard to ask for a better deal.
Of course, it’s always best to shop around before making such an important decision. There are hundreds of cards out there that are suitable for grocery shopping. Some are better than others, but there are more than a few that offer a little something that might give them an edge over the others in your view. Here are our own personal runners-up to the Blue Cash Preferred credit card:
Capital One Quicksilver Cash Rewards
Quicksilver Cash Rewards offers a similar deal to Blue Cash Preferred, but at a more modest scale. We recommend this one if you have a smaller grocery budget, if you’re not trying to feed a whole family, but maybe yourself and one other person. For instance, you only get a $150 cash bonus, but you only have to spend $500 in the first three months in order to earn it. You get 1.5% cash back on all purchases. This one is probably preferable to Blue Cash Preferred if you’re working with a smaller budget or building up from a lower credit score.
US Cash Bank Visa Signature Card
The Visa Signature Card offers five percent cash back on your first $2,000 spent per quarter in two combined categories of your choice, a $150 bonus for your first $500 spent in the first ninety days, and 2% cash back for general purchases like gas stations or grocery stores. Basic, but easy to use, reasonable rates, and gets the job done.
Selecting Your Card
American Express Blue Cash Preferred is our pick for best card for grocery shopping, but a credit card is like buying a house or a car or picking out a dog: there’s really no such thing as best, there’s best for you. Before filling out an application for any card, be sure to weigh your options. If you’re feeding a family of five, then sure, you’re looking for a card that rewards you for dealing in a high volume. But if you’re living the bachelor(ette) life or just starting to build your credit score up, then you’re probably after something with lower limits, and APR might be your chief concern.
Take your time, do your research, check your budget, and crunch the numbers. Then, choose the card that works best for your needs, on your budget.
Dana George-Berberich is a freelance reporter and novelist. She has written finance articles for newspapers across the country and for companies like Dun & Bradstreet and Bankrate.
