5 Creative Ways Rewards Credit Cards Can Help Combat Rising Grocery Bills

Doing a double take at your grocery bill these days? You’re not alone. Food prices have been rising, and consumers are feeling the pinch while trying to feed their families. 

A young white woman wearing a white jacket and a face mask holds a lemon up in a grocery store.

According to the U.S. Bureau of Labor Statistics, the cost of food jumped a whopping 7.9% between February 2021 and February 2022. That’s a lot of bread… and we’re not talking about the kind you toast. In fact, it’s the largest yearly increase since 1981. Protein lovers are taking an especially hard hit–prices for meats, poultry, fish, and eggs have climbed 13%.

Prices are predicted to keep climbing, too. According to the United States Department of Agriculture, food prices in 2022 will rise an estimated 3% to 4% for at-home food and 5.5% to 6.5% for away-from-home food (such as takeout from restaurants).

So, what are hungry shoppers to do? While you can adjust your menu, clip coupons, and limit eating out, there are other creative ways you may be able to help pay for higher food costs without totally blowing your budget. Among them–using rewards credit cards.

Rewards credit cards offer some sort of reward each time you make a purchase with your card. Often the reward is cash back, which you can then use to pay for groceries.

A young white woman wearing a white jacket and a face mask holds a lemon up in a grocery store.

Here are six ways rewards credit cards can help shoppers combat rising grocery prices:

1. Keep your cash

Instead of paying cash for your groceries and other goods and services, whip out your rewards credit card as often as possible to rack up the rewards. Many don’t come with an annual fee, and it’s a simple way to put some extra money back in your budget.

Reward It

“You’re not going to get rich on rewards credit cards,” says Matt Schulz, chief credit analyst at LendingTree. “However, the right card, used wisely, can help a family stretch their budget just a little bit further on a regular basis. During a time when everything seems to be getting more expensive every day, that’s a big deal.”

2. Choose the right card 

Before you apply for a rewards credit card, think about what you want from a card and how you’ll likely use it. Then, you can try to prequalify, which allows you to see the rates and terms you may be offered without impacting your credit score. Understanding how you use the card and its overall impact on your finances will help lead you to the right card for your situation.

“It is a big mistake to get a rewards card that doesn’t match your lifestyle,” Schulz says. “The best cards give you the rewards you want for things you would spend on anyway. If you never fly anywhere, there’s no point in getting an airline card. If groceries are your biggest expense, you’re leaving money on the table by not having a grocery rewards card.”

3. Take advantage of incentives

Some rewards cards offer special incentives for purchases within certain categories. For example, they may give you 3% back for food but 1% on everything else. Another may offer 3% for gas but 1% on everything else. To maximize your rewards, you may want to have multiple rewards credit cards with varying incentive categories so you can choose to use the best one based on what you’re purchasing.

“The best way to maximize your rewards card is to make sure that you know which types of purchases earn the biggest rewards on that card,” Schulz says. “There may not be a huge amount of difference between the earnings rate on your credit cards, but it still matters. Ultimately, if you use a card that gives you just 1% cash back when another card in your wallet would’ve given you 1.5% or 2% cash back, you’re leaving money on the table, and that’s the last thing anyone should be doing today.”

4. Check out store cards

Some of the nation’s biggest grocery sellers even have their own credit card offerings that might be worth considering. You may get a significant discount off your first purchase, then receive additional discounts and perks going forward.

However, as Schulz cautions, it’s important to understand all the details about that store’s card before you apply. Look out for card disadvantages like low credit limits, high interest rates and deferred interest.

5. Snag a sign-up bonus 

Many cash back cards will give you $100 or more as a bonus after spending $500 to $1,000 on your new card. That $100 can make a massive difference in a family’s budget for a month. 

“Just make sure that you understand exactly how much you have to spend in order to get that bonus and that you’re comfortable with doing so,” Schulz says. “Regardless of just how lucrative rewards may be, overspending to get them is typically a really bad idea.”

6. Avoid interest 

What not to do when it comes to rewards cards: Carry a balance.

“The math simply doesn’t work in your favor,” Schulz says. “You don’t need to be an accountant to understand that paying 20% interest to get 2% cash back doesn’t make a whole lot of sense. If you regularly carry a balance, consider a balance transfer credit card instead. That way, you can knock down that debt more quickly, freeing you up to chase those rewards sooner rather than later.” 

Will rewards credit cards completely make up for the rising cost of food? Probably not. But when used properly, they offer a simple way to bring home a little more bacon… or fruit and vegetables, which haven’t seen quite as much inflation as meat (7.6% between February 2021 and February 2022). And with prices predicted to continue rising, we can all use every budget boost we can get.

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